as i knew when we open access and that is a troubled white house while we are always in a crisis. people throw things at the walls. but you have to practice for the end of the crisis when everyone is exhausted and going home to make sure the data that is critical data or you wouldn't have been in the emergency for the first place has been closed again. it is the boring details that really amounts to safety. it's kind of a big day to say it's great for penicillin is available. it's terrific but hand washing turns out to be the number one thing that actually lowers diseases in large facilities. so there's a low-tech, high tech and understanding and education components that i think is where innovation needs to happen. >> there is a lot sort of an extension of the sand boxing but there is a lot you can do with the data and get a lot of

benefits when it is not identified we can learn a lot about climate change. there are different types of contexts in which the data is collected to make a difference and could have different rules. as for the kind of massive quantity of data that is used for medical research is probably going to be pretty well identified in most cases. much well identified an and are used for other purposes like marketing. you actually need to know about more about the individuals for it to be possible to do the medical research. but that's the world in which there are -- there is not only the wall regarding how the data is to be handled, but the governance models like institutional research boards

and a multi-thousand year history of culture of confidentiality regarding the information. so the rules in that world are stronger already whereas in the marketing context there aren't very many rules and you even would want to be looking at what is the ultimate purpose here and how does that stack up against using data for medical research for example and light u.s. published some rules that would significantly reduce the risk of using the big data in the context of that has left the public benefit at the end of the line and where a lot can be done without the data being very personally identified. >> when you say industry do you mean the government? >> there could be any number of ways in a medical context for example there are many sources of the rules, some of which are

cultural. but there are also the walls and there are also governance procedures. so there's lots of ways to establish rules and we could learn from some of those pieces in other contexts there's an interesting proposal called the thought experiment before he went to washington state. in which he proposes that companies create ethical review boards for the data projects. this would be internal, not a government thing, but the board that is appropriately within the company that has a basis within a policy that has some value as underlining it and that they are then reviewed into a wa in the t research involving human subjects are researched where you look at the risk benefit analysis and the risk not to the

company but the risk to the data subject. that sounds like setting up good governance bodies in the occupations and other privacy or compliance functions you are you seeing the market move a little bit towards companies thinking more and more about that? >> definitely. that is one of the primary roles i play. my team will look at the privacy which is now including design guidelines. it turns out they make pretty good requirements to build out. and when you put those together further is the vendor sec where all security is protected analytics and big data, then we put these things together and i would be the kind of first-line arbiter and then if we have to escalate above that, we do. but i think more and more people

are doing that and i think the hard part is some of this is happening for smaller organizations at the procurement level. so it is maybe a contract manager who's facing some sort of questions about maybe liability for a vendor who is going to be providing data. they may or may not know anything about these risks and awards or what the controls are. they may have the sense that there should be sensitivity liability training but this is where that lost in translation peace is quite alarming. >> what does that look like when something goes wrong? how good is the governance at that point? >> the governance is something that people sort of look at as when you are in that situation and people are trying to evaluate whether this incident has occurred at a company that is diligently taking care of its information or not. my sort of reaction dealing with companies that have struggled

with these situations is that a lot of the steps that are being discussed by governance and all the protections are very expensive and so very time-consuming and they get in the way of doing business try to serve your customers or engage in your research activities. and so there's i think we all need to think carefully about pushing that model into areas where the value of the data that you are protecting is it really worth it. on the other hand, i think we always used to say that there are two types of companies. companies that have been breached already and companies that will inevitably be breached because everybody will be breached. i saw the terrific variation of

that of the other day in "the wall street journal" there was a technical blog interview with a venture capitalist partner. he says look. i am a firm believer that there are only two kinds of companies. those that have been breached and know it and those that have been breached and don't know. most of what we do in security is around prevention, prevention. great. just know that it will work. know that they are going to get in. that is the kind of world that we live and that is what we see. if you are a big data company you want to recognize that.

it's part of the incident response and approach to security in the first place and you want to have a sense of the colleges to explain the situation and the courts and people in the public. there has been a weak link in the process maybe he would have been able to present by design or by luck. what happens in this area is that is where the plaintiffs in the lawsuit and the regulators are going to focus. they focus on the weakest link. the people that you are dealing with and the public to make sure that they understand imperfect security doesn't mean unreasonable security.

if you have to look at the totality of the circumstances, if you have a datacenter that is in the fort knox type of a physical facility with the guards and if you have the firewalls in the segmentation through the network and strong access and authentication controls you have the privacy policies and training all throughout the context. you hire outside experts to come and advise you on the aspects of the design. you have performance monitoring. file integrity monitoring. all that's in plac that in placn enormous amount of security you are still going to be at risk of being hacked and you won't according to ed.

yet whenever these things have been the focus is always on how did that look? i think we have to gain a sort of mature approach to these kind of situations and recognize that we are in a world where it may be the best -- you agree we may never bring it down to zero and that approach carries through to the way that people react to these incidences when it occurs because the overreaction that is placed on companies by the brand damage and by the cost of the litigation really makes a cost to that. but the companies themselves have a substantial cost striving towards reasonable security. you have to put so much more into it because of the concern

if something goes wrong it will be substantial. >> this would be to the marketing department entity analytics department as well taking the governments model and moving about. it's part. i want to hit one more topic before we open it up for the discussion. professor, you made the observation that there seems to be a lot of technological self-help and that consumers or as we say in my household don't use the card or just pay cash and then that my kids will their eyes at me. that is the argument over how we get the consent or is it over the body of boy am i going to go

out and buy that refrigerator, am i going to buy that for smart car anyway and just know it's going to track stuff unless i physically turn it off? is that kind of where the consumer marketplace is going and the regulators behind them at that point or is it business behind that point are or we just deluding ourselves into thinking that we have the ability to self regulate. it' >> i love when people overspend on the security. that said, privacy is not security so i think that is a really important point to make and i think the more savvy we are as the actual asset the more we will mak make discovery decis and development decisions and investment decisions because as it turns out in chapter eight you can work with a 17-year-old boy that wants to create the

running app and across the afternoon you can have a privacy ready principle respecting not out of the data model program and if my nephew can do it, so can you. so that's the thing about you have to start somewhere and figure out what's your hurry or the czar. it might take an extra afternoon for you to think about your deal but i also think that instead of the cost of goods sold we should have the cost of the data and i think that is the equation that is missing in a lot of our context will risk and reward discussion. there is no choice. you're going to fix it and that is what happened. we went and protected the most of it we already had which was the financial. so we missed an opportunity from the intellectual property perspective to go after the data not just financial data, so the

cost of the data added well informed us how badly people want cars that told them that they are cold. i already know i'm cold. i don't need to have someone that memorizes the 69 degrees yesterday. sometimes i'd feel in my go for 85. i don't need someone to tell me that. but that's just me. once you figure out that knowledge of the exact configuration where the location i know when it's bad. i don't need a smart refrigerator to tell me that. we are going to figure out and play for the environment that we currently have. i don't want it to be regulated that there is some practicing that will happen to say what is

truly creepy and what it's worth paying for. but i think before we can have a real and analysis, we need to talk about the worth and it is difficult to talk about work because the data is of course a human right it's about dignity seven minutes that you start bringing accountants into the room, people start getting the road version, but i do think that money does spur innovation and investmen investment into cs that do know how to not just say it's really hard. if he isn't going to fund you it turns off they will. so i am looking at the gadget and the technology that has to be modified so it turns out that they are looking for the data so if you don't have a candle and you are a young company you can be using money for blankley said

its expensive get over it. >> at the workshop that we did recently for the developers and silicon beach we had venture capitalists that spoke to the audience of mostly young developers, not too many lawyers and they were talking about the growing market for the privacy enhancing technologies in the wake of the revelations we've been talking about privacy enhancing technologies from the beginning it seems like and now there is becoming a market for it. they also talk about how these two in particular how they were concerned about investigating the data practices of the projects that they are going to invest because if they have a screw up at the beginning they've lost their money so they recognize that it is an investment consideration at

another equation i want to mention is the way that there are a lot of the equation in the privacy i guess the way that the data breach notification law has redistributed costs and reveals the cost of certain kinds of data practices that were borne by the consumer and the deed of subjects whatever they turned out to be. and instead, the cost of doing the notifications at all that is involved in that as i certainly know it can be quite costly falls on the entity that has more at ability to be an appropriate steward of the information and make changes that can protect them and reduce the cost. so, i think it is just an interesting privacy law and security wall in that it doesn't say do this don't do that.

it says when you lose control, you have to tell. >> i am sorry to keep going back to innovation. these things are revolutionizing everything. and it's not because they are all combined into smaller. i think it is i have to buy the covers of my device won't break. but steve jobs never got the memo on that and i lost. the idea that it changes everything is location. it's location, location. with context comes the really big data that can allow interesting and exciting things and really scary things. and i think it always -- if you are a privacy person it's kind of like you have to watch the i have a dream speech to remember that it's about people and then you have to and brandeis the right to privacy.

i'm assuming that you all read it to your kids at christmas. i do. but it's about technology. it's about the ability to have a relatively mobile location-based technology that would reveal things in context where people couldn't control the context. and it sounds pretty relevant to me today as it was at the turn of two centuries ago. >> interesting enough, the government here we are talking about corporate issues, california as you noted and it is a right in europe and other countries but otherwise it is quite a struggle that we are dealing with today. >> as it has been pointed out, we are more regulated than almost any place on the planet and we are truly regulated. it's not lipservice. they will come get you. >> so, we have time for questions if folks want to ask

questions of any of our incredibly knowledgeable panelists. the microphone is there. >> the elephant in the room is the revelations and what that has done to expectations. i have heard a good defense that we shouldn't use the breach is to stop collection or to stop the assembly of the data that is very important. so the rules may not need to be in the infrastructure technology collection but they need to be in use and i think that was made very clear. my concern is there seems to be a belief that i think i share that the rules just do not apply to the government at al governmd

that people will not -- the rule of law that might apply to how the data is used will not result in any real punishment of people who abuse the rules. is there a shortcoming here that the rules of use are not going to be effective at all unless there's a true enforcement of the rules? and we can talk about class action for breaches and failures to disclose and the like but it seems to me those are backed compared to the governmental problem and i wonder how people feel about that.

we have learned from the government legal opinions that have been declassified about the scope of the government eavesdropping authority the rules are very different. and if that is the case, then we do need to be thinking about oversight and how to make that oversight process worked to make sure that the actions of government -- even if they are legal but they are beyond the scope of what is good policy. and i think that there are serious questions whether the process is able to function or has been able to function effectively. whether the overseers have the information that they need in order to exert the kind of guidance that they are supposed to exert. that is one of the most difficult questions raised by the revelations in all of the discussions that came after. they don't know the ends and outs of what is happening

>> every time that you mention ed snowden you should also mention brian krebbs who has a blog who tries to help people rather than fame-seeking which is a matter we can talk about based on the nature of the revelation. i have my own personal opinions. but i think that there are heroes that help us that speak out and look at what is going on that information that is available. brian krebbs is one of those people not affiliated at all. i used that as a rule because it is hard for me to be surprised by those revelations. it -- i am sad by those revelations and i agree that there should be definitely consequences.

but it also highlights to me there is a burden of collection and the burden of fiduciary duty that i don't think has been exactly put on the shoulders of the right people in the right places throughout the industry but i also think that the engineering if you would appeal back how all of those intrusions remained by someone like that, a lot of social engineering even within eight groups of people in that organization is a code of conduct that was breached and it was a code of conduct that was used against them so it's tough and i think when i take the education from that into my own context as a leader within my organization, i talk as much about being aware of sharing information and collecting information and also being polite and sharing information when people called you and ask

you and that is where a lot of those documents were collected. it wasn't necessarily available through moral channels. that is the whole different thing of how that went down and i am not privy to d any of that information. >> there are different rules and that is the fact of life that we deal with. i moved to californi californiae two years ago and i had the pleasure of sitting for yet another examination and the shocking thing to me over the 20 years o that passed for roughly0 years that passed was the fact that it has been completely routed. if you go back and look at the cases and think about some of the questions that come up and think of it when maybe the cases

that we studied when i looke std up, the procedure and not look at the cases people study now and realized there is no exception that won't swallow the rule. and the government has broad rights at the moment. so this perspective and the lawyers i look at that as a different fool creating an interesting backlash now and working with the organizations that try to deal with the government both in friendly perspectives and antagonistic perspectives in creating industry government relationship issues that i think will be interesting to see how they spell out but remember the fourth amendment jurisprudence changes incrementally and slowly so it is going to take a long time in the united states for those to change to the pendulum. >> and we can set up rules for the government. and i think that they now have

quite a bit of discussion that should have taken place some years ago about getting an actual risk analysis about how much privacy you need to give up on security and how much actual security -- how much security is actually obtained by various privacy measures and a more thorough analysis of some of the policies that are certainly called for. >> the current system of data collection and management is dominated so the same information about a person is in many places and many collectio collections. i'm not asking whether it is politically feasible. i think i know the answer to that. is it sort of technically and

economically feasible to imagine a regime where you are not allowed to hold information about a person unless it relates to your relationship with the person that is to allow the system of many lines i a a graph of the drafters rather than something dominated. >> so, back to the fair information practice, this is about purpose and proportionality. these are two of the same but have not been technologically innovative against well enough and so i think ten you create proportionality, absolutely, you can. does it create more metadata? probably with a short term shori get a proportionality and do we have the fiduciary rights to deal with information or control such information is certainly

within the realm of possibility if we used a fair information practice principles with practices like the unified modeling language that we proposed. it is an academic question at this point. >> as a technical matter it is possible i think to do more to reduce the control of how much information so that he has. there is a tendency to take the easy path and just collect everything and just keep it because it might proud to be useful. as opposed to being very thoughtful from the beginning about what h what you really ned how you can build up a data bound to maintain the things you actually need for your business. rather than just keeping everything around just in case. so, is part of the problem

that the general public -- are they going to notice that there was a data breach or if someone finds their name on expected to be on the no-fly list otherwise people don't really care about it that much? if you agree with that then what do we do to increase public care about this? ..

and what they found was those who are the least concerned about privacy had been mistaken belief that had a whole lot of legal rights that they didn't divorce the most concert at a greater the rights they did not have. >> i think that's true. certainly in our school safety programs, i think defining what privacy actually is, it's not coming up, concealing, encrypting. we are having this conversation at the injuring level. security guys all the time, it really is proportional, agreed to, they are sharing processing throughout davis lifecycle. i think we just don't really quite heavy language at.

so when you ask someone do you like it and they say sure, then you ask them if they like a candy bar, and while they type the e-mail and can you see this behavior. so the conclusion has been, well, we give away our privacy 14 the work if they really understood the trade off or hey, you do have two bucks in your pocket, why don't you go teachers of a candy bar, i don't think that dialogue has occurred yet. i'd really don't. i think it needs to happen at multiple levels for us to really have the analysis. two people care, don't they care? some of these bad things that happened to create a market for security and privacy. i think that's the silver lining in dark days. it's not just business is doing better but that the awareness in the marketplace is doing better. once one industry moves, the retailers didn't want chip and p.i.n. it's expensive. it adds another layer. it slows down checkout of

another authenticator at the checkout line but now we've had this massive intrusion of card swipe level, boy, oh, boy, those guys are saying, they're the first one to my to say sign me up. they believe it will help them in a lot of different ways. i'm not pointing out any one company. >> if i could jump in on this, i think people do care about these things, but they often feel like they don't, there's not much they can do to affect their privacy. et believe the choices you make won't serve to protect you, then you won't act differently. you might believe that your actions don't have an effect because you believe the law already protects you when, in fact, it doesn't. you just might believe that your information is out there and there's nothing you can do about it. if we see people, for example, being willing to sell their social security number for a dollar, we have to bear in mind that's an entirely rational thing for them to do if they believe their social security number is already on sale

somewhere else where. i might as well get that dollar myself as those having a go to some data. so we need to be careful about how we interpret the way people behave, bearing in mind what the expectations are. >> just as a follow-up, perhaps there is a space for may be a somewhat more paternalistic approach by government, like the europeans, perhaps, i don't know, michelle, you have to comply with all these rules around the world. >> i love europe. no. i think, you know, you can't tell people how to care about privacy that way. they say you will care and you will be, i think it behooves us to be want to show value we have to be more transparent about what's going on. real choices, in textual understanding. i get a graphic novel, instead

of writing and you do have the written policy but i also have a policy with cartoon name just because i know people don't read privacy policy unethical be easy to gather the context about the amount of sharing this done in a security context that i didn't understand before i came on board. and i think that's where we are reaching out to students, for every set, you have a laugh lauh track and likely falls in love, like making out isn't enough, you have to have violins but when you read a contract there's no musical score. i don't know how to feel and when and if he gets up and a poor decision. if you want someone to feel something and know this is the moment, the social security number is the moment, i think we should think about music and think about contacts. it's not just pop up but there's huge, huge room for innovation, how people like it. >> joan, you were using beijing

and yang example -- dinging yang example. spent there was an interesting work called privacy on the books and on the ground, and they studied a few european data protection authorities and companies in europe and then american companies, and what they found was with a couple of exceptions, there is actually more internalized implementation of privacy governance in the u.s. companies with a much lighter system of laws than in europe where most of the privacy program in most countries will stretch to filling out forms and comply with the bureaucratic processes and not really building into as a corporate value with real implementation. the one exception was a germany,

which was much more like the u.s. where as it was much more internalized in the company with resources to support it and build into all their processes. >> that's what we're dealing with union yang, making sure we have the flexibility to allow the innovation that it doesn't become a real process of think about compliance which just basically freezes in place or stops innovation allowing the flexibility to go, to have innovation while also protecting people's rights when we see that there's a potential for real harm, that we should have laws protecting them. >> any more questions? >> hi. i'm just wondering, so some of the research literature regarding big data and potentially legal institutions was positing the potential big data or small data could be used to address the consumer law market or get legal institutions

better access to people in the legal services don't know that they have that or have a need for legal service. i wanted to know your opinion on whether big data or small data sets could be used in regards to broaden more legal services to individuals who potentially can't afford to go to law firms or aren't covered by legal aid? >> how would you get to the data? >> what kind of data? >> i think david can do a lot of things. i think the analogy that i'm hearing you ask about is kind of like the bane of physicians but also the boom of patients. i think i got malaria and they're like no, but it also helps people be more informed and engaged in the process. in the legal services may be a similar possibility. i don't know. >> i'm not aware of any --

health information is where we see the ability of people bringing information and using information to deliver better health care services to those who may not be able to pay for them. we see many aspects of the affordable care act trying to get information exchanges set out. but we don't have that yet come into different industries or legal services yet. i think it's still a very disparate almost vulcanized system of providing services to people. >> i know there was some concern after going back to snowden, but after the revelations that u.s. companies were going to lose business because of fears of u.s. government surveillance, and i know that stewart baker said very forcefully that there was no evidence that u.s. companies have lost any business. i have heard reliable reports on

the other hand, that non-u.s. companies have reported a spike in business. i was wondering what you know and can say about the business affects of this? >> stewart is a friend. we know stewart. stewart doesn't say anything non-forcefully and that's from someone he doesn't say anything non-forcefully as well. stewart is a friend. i think we've had at least a quarter, anything that financial results speak for themselves. i'll leave it there. >> i would be interested in the comments from the panel about culture. there were some hints at that, and it seems like the backdrop for whatever's going to happen legally is culture. and for one thing as we've talked about, that's different country to country, even regions within the country little-known part of the world and traditions

in those parts of the world. but just looking at our culture for a moment, most of us i think were groomed on the 10 commandments at it was a nice simple list that was drilled into all of us. and i don't recall one of them saying, thou shalt not put thy nose in other people's business, and our mothers may have told us that, but, in fact, it was observed in the breach. everyone puts their nose into other people's business. so i'm suggesting that is part of our culture, and certainly young people nowadays are very free to put their information out knowing that other people are going to know their business. and culturally seem to be much more willing than previous generations to do that. >> i think it's not just a cultural thing, i think there are generational differences. i agree with that 100%. i signed up for some web

service, and a couple months later went to log in agin and i couldn't login. i couldn't figure out what the problem was. i called them up and they said oh, yeah, you must've turned off cookies on your machine, and i got up on the wrong side of the bed that day and i said gee, i'm not going to do it and i want my prescription back, just as he would have. he said okay. they return the rest of the balance of my subscription and i was like a maze. that was easy. great, okay. i thought everything was fine until i told my daughter and she tore my head off because she used the service but she said, dad, get over it. what's your problem? so they want to put a cookie? what's the big deal? selected, you know, the father thing and i said look, i'm your father. at about two months later i frankly got pretty frustrated that i didn't have the service anymore and put the cookies back on and i signed up.

i think there is a generational thing here. i'm curious to see whether people feel that there's a generational issue, difference of views going on in other countries as well. and i think that as we all get more used to the notion of the fact that your data is out there, it's like my trade secret story at the beginning. once you put your data out there, maybe 10 years ago people were surprised that the notion that you could be driving down the street and would be an electronic ad targeted at you because they knew you were driving down the street. people 10 years ago would say how could he do that? where did he get the data? it's not surprising anymore. people now understand it and understand -- i think the privacy, sort of the sense of privacy or expectation is eroding. i think the younger people are likely to be more, less interested in worrying about it.

they could be a lot of it is because the rest of us older people are the ones pulling the strings these days. i don't know, we will see. >> i think cultural values evolve over time, and i also think people grow up over time. and their own experiences can construct them over time, and gender people aren't always aware of consequences in many arenas of what they do. that said, i don't know that there won't be some very much more common understanding of being everything being out there, but i do also think that we see a lot of privacy instincts in younger people. they certainly are concerned about protecting the privacy against their parents, for example. so you know how i don't think we

can say the next generation won't care. i don't think we know that. >> in fact i think we know it's not true. there's pretty good data on this now that shows, for example, the young people are more likely to tighten the privacy settings on facebook than older people. they are more likely to adjust the settings at all than older people, and junk people are quite savvy about what to do and say online. if you have a teenage kid, don't be fooled into thinking that you can look at their facebook page and know the stuff about their life if they don't want you, the pair, to know. the fact is that kids are able to commit it with each other online and share details of their lives with each other in ways that are very difficult for the people who they really want to maintain privacy from, meaning their parents and teachers, to figure out. i don't think it's right that

young people act like they don't care about privacy. that's not what i see from our students, and all of the people who have studied this in detail seem to find that, in fact, they do care. >> yeah, in fact they don't care about the datasets that we care about necessarily, but we certainly see, if, for example, it any other world governments behave like a 15 year old girl had a secret crush, we wouldn't have snowden revelations. they switch on and off site. they are very choosy. they may have a fake site, a good girl site that is different from the party girl site. i want to address another issue. this is actually a call up the was written by j. klein, the president of a privacy consultancy and he writes whole article on sacred references to privacy. so this actually turns out does go way back into the book of

genesis and the koran. we have writings from mohammed. and we also have chapter 24, 77 of the catholic church stating respect and this is a long time ago. respect for the reputation of persons and more likely to call them unjust injury, become guilty of rash judgment, even hassled assume without sufficient foundation. the moral faults of a neighbor and it goes on and talks about how the sacred text in forms with united nations did in their treaty for human rights in 1947 following the largest privacy disaster on the planet since the holocaust. you could organize the murder of that many people without computers or privacy breach. and that's exactly what happened. so that's we see some of this stuff. it does go back in time. as i said the biggest data set our cultural history going back 3000 years.

i think people are not that interested in continuing the same mistakes again and again spent this is fascinating. thanks. i'm curious about legal developments, particularly vis-à-vis common licensing, these are the privacy. it's very creative, place very much about potentially providing a compliment to copyright related things. but it's an emergent kind of law that relates to this developing transparency that's the consequence of mr. trippi did a check on this worldwide. i'm curious, i'm asking this in the context of developing an online world university and school like mit and potential all languages, mit centric degrees but i'm curious if you can see any developments vis-à-vis licensing around or something peril around privacy law that would rewrite some of the questions of the criterion is of private questions which

you have all sort of been quite eloquent about? >> i think yes is the anticompetitive it's really where you see happening is kind of in the procurement phase. particularly i think the europeans model clauses for data transfer is an example. i don't think it's a perfect example because they are nonnegotiable which makes them to me -- i think more and more because people are trying to push liability around the plate and we have an obligation if every global environment to ensure that their processing of data, regardless of the circle of vendors and others, so we are coming up with more and more common languages would have shorted negotiations like when someone is either coming in as a service provider or buying software or we are sharing datasets. if i was a law student today,

this is the two sides of the cathedral moment for you, to write about law review article. >> one of the things to watch out for or to think about is who -- is a data set as someone has collected or they have ago by the data sent you could roger silva or an individual. which case may not be creative commons but more probably the new type of model. in that respect though we already have that going on if you do not track settings and browsers, for example. and it seems like most people got out of the way, even in california, statute to say you know that a we don't look at it yet because we -- right. we ignore it because at the end of the day we don't know what to do not track means. that's kind of with the issues you have the individual and have a contract of adhesion back to a corporation that is trying to collect data from you, difficult to enforce that at the end of the day. that's kind of the cultural

issue record have to bridge th that. >> i have a quick question on commercial uses and ad targeting. how would you support targeting of the ads for an individual on the individual basis, like their reading habits or surfing habits, or device and what do you say? fingerprinting ads for people who are using safari over microsoft or internet explorer, or mac versus windows? >> i'm not sure of the question. >> so when i deliver ads, i can deliver ads to a person on two basic at first, what you are

browsing, sports page, like i can show you ads for nike shoes, as opposed if you are browsing using apple where your individuality doesn't come into it the picture but i would broadly categorized who's using what kind of technology and just based on that basis i can target on that. >> i don't have a good answer. it's a whole area, but whole thing about what you can target and when does it become personal. i think your second scenario of looking at someone's operating system and making assumptions about them, and for instance, about they may or may not be targeting you if you're taking that you're adding their mobile data, their location and e-mail account that they may have and that certainly is regulated. >> let me be clear. how would you get all of these free services? how do they make money? if they are not -- selected from

privacy point of view. if i say google, yahoo! and ebay, paypal, they're not going to store the data. and how do you suggest they should make money or make ads for something? >> the last advertising now i participated in, the percentage of online advertising dollars that come from targeted advertising that is based on tracking was under 20%. there's a lot of advertising going on on the web that doesn't depend on collecting personal automation and using it to target ads. >> i want to make two suggestions that don't have anything to do with target ads but i meant to mention an earlier, which is i think they're interesting. one of the fiction books called little brother, it is good

reading for hig high school ages until you get to the end, sport or. i think they go on to for. i'm not going to give it to my daughter for a while. it's about a kid is trying to avoid government surveillance and it's a very kind of dark world of over surveillance, but i think it is interesting and it talks a lot about how the location plus parental and overuse of government cannot impact but i think it's an interesting fiction keep it and then another important book i think to this debate, tonight about the day in particular which is mickey's book trillions. it talks about today, there are about a billion nodes that can send or receive information of a kind. before 2020, the book went into print last year will be faster or 2016 will have one choice

knows of center type data and to put that into context in human brain thinks 30 billion seconds ago was 30 years ago when we were all this going and doing all sorts of funky things. but a trillion seconds ago was 30,000 years ago. that's a lot of difference of humanity that's happened in the time spent in the think there's a lot of humanity that live within the trillion data notes. we will have to start developing strategies, policies, protections and experience some day to armageddon in the next when we get 2 trillion. i think it's an excellent read. it's not a law book. it's a what if book. >> it's all very nontransparent. >> yes, right now it is. absolutely. >> all right then, if there are no further questions, please join me in thanking our panelists for a really --

[applause] >> fascinating panel. thank you very much. [inaudible conversations] >> tonight at eight on c-span2 its booktv in prime time with a series of afterwards programs.

an agenda that is starting at eight eastern here on c-span2. over on our companion network c-span, a recent hearing examining brain injuries in contact sports like football and hockey. a house commute from nfl and nhl officials as well as scientists and doctors and athletes about the extent of had related injury and what's been done to prevent them. and we invite your thoughts on the topic. weighed in at facebook.com/cspan. remember to watch the hearing at 8 p.m. eastern on c-span. >> at the end of the day i think economy is going to continue to need enormous monetary stimulus. i think the fed will not be raising rates for quite some time. i am optimistic that use economy is going to accelerate. i think one of the core things here one of the core dimensions is the fact that last year the u.s. economy grew 1.9% with

fiscal drag from high taxes and government spending cuts reducing growth i 1.3 percentage point. without that fiscal tightening the use economy would've been growing over 3%. >> as you know, cbo does not make policy recommendations and that's very important. because policy choices depend not just on the analysis of the consequences of different courses of action, but also on how one ways those consequences are what values one of life. there's nothing special about our values it's up to our elected leaders, your and my elected leaders to make those policy judgments. our job is to help congress understand the consequences spent this weekend on c-span, views on u.s. economy with the cbo director and experts from td bank, the financial times, mit and the university of maryland. that's followed by the first press conference by new fed chair janet yellen saturday morning at 10 eastern. and on booktv, live coverage from the virginia festival of

the book. first a panel on african-american history, followed by the impact of foreclosures and evictions in the african-american community. that's our saturday at noon on c-span2. and on american history tv, who might have been "time" magazine's person of the year in 1864? historians decide saturday morning at 8:25 a.m. eastern. then join historians to talk about the pic live on c-span3. >> microsoft founder and philanthropist donates talked about global poverty and department last week at the american enterprise institute. he discussed how prosperity is spreading around the world and predicted that by the year 2035 they will be less than 10 countries living in poverty. he also discussed some of the work that the bill and melinda gates foundation is doing to improve health care and education around the world as was the role that philanthropy place in ensuring justice.

mr. gates is the richest man in the world with a net worth of $76 billion. >> this is bill gates. [laughter] [applause] >> with his wife, melinda, he's the coach or and cofounder of america's largest private foundation, the bill and melinda gates foundation. they worked to reduce poverty and expand health care overseas and to improve education here in the united states among other things. previously, he was the chairman and ceo of microsoft and the world's largest software company which he cofounded in 1973. most importantly, like me, he's a native of seattle and somewhat of a seahawks fan, which is good. but that's not what we're here to talk about. we who to talk about is incredibly important work with the foundation, the work that he's doing here and around the

world. teachers so many of the priorities of the american enterprise institute to build a better life for people here and every place, people who suffer from need, from disease, from tyranny. what we did about these things? he's asking the question and he's putting his own resources behind answers. we will do what he has to say about his latest work. welcome to aei. it's honor to have you and to be among all of our friends here. you just issued your annual letter for 2014. i recommend everybody read it. it's a very interesting piece of work. it's detailed and it explodes a lot of myths about poverty around the world. you offer an incredibly bold prediction. you say that there will be almost no poor countries remaining by the year 2035. what do you mean by that? >> the primary measure, which has all sorts of challenges, is gdp per person. but we don't have a substitute measure. so just if you take that, world

bank classified countries with over 1200 per person per year as moving up into a middle income bracket, so moving from low-income to middle income. and we have today 45 countries that are still in that low in comcast accord. and what i'm saying is that by 2035, there should be less than 10, and they will mostly be either places like north korea where you have a political system that basically creates poverty, or landlocked african countries where the geography, the disease burden, the disparate ethnicities means that they have been able to bring together a government that in terms of education, infrastructure, health does the the the most minimum thanks for the. so we are on the rising tide that's not recognized.

it's overwhelming how prosperity is spread around the world, say from 1960 where the were very few rich companies is to countries and a gigantic number of poor countries. now most countries are middle income countries, and poor countries are much smaller. just saying they will all move a pass that threshold doesn't mean they won't have poor people within the countries, doesn't say that countries will be fantastic, but it will be a lot better on average than it is today. >> that's an extraordinary thing. we have a tendency to despair when we look around the world and we have a tendency to say the world is not getting better because of the way we view the news. you think that's a myth, right? >> yeah. i think this is a deep problem in perception is that if you want something to improve, you have a tendency to be bothered by the status quo and to think

that it's much worse than it is. that can be beneficial because you don't like, say, the level of violence in the world, the level of poverty, the number of kids dying. but he should divorce yourself from the true facts of improvement and look at the exemplars, look at what's worked, if you get sort of a general despair about is the world improving, then you won't latch on to those examples. the steven pinker example, one of my favorite books of all time, is if you ask people, is it is one of those violent eras in history, they will say yes. overwhelmingly, americans say yes. it's overwhelmingly the least of violent era in history. and so what it means is you're discussed with violence actually increases, and that's partly why we take steps and why within our own society and the world at large it's come down so dramatically. >> i love your optimism.

and so based on your optimism, given the fact that the world will have only a few poor countries in the year 2035, what's the gates foundation going to be doing in 2036? >> well, there are a lot of diseases. over 80% of the difference of why a poor child is 20 times more likely to die in a child in a middle income country, it's these infectious diseases. it's diarrhea, pneumonia, larry, and then there's a few adult diseases which are way more prevalent in poor countries, tb, hiv. and we take it on as a central mission, it's a little bit over half of what we do, do get rid of those diseases. and so that wil within our prioy in till we're basically done with those. and those are tough enough that i would expect us, it will take us 30 to 40 years to really be

done with those. and then we will have a crisis because we will have the problem of success and will have to say, okay, what is the health in equity between well-off countries and poor countries? is it obesity, heart disease, and what interventions? and even before 30 years are up we will start to think about this. but right now we're sort of maniacally focused in our health on those poor world conditions because we see between research and getting things like that, vaccines and drugs out there, we can basically save a life for about $2000. everything we do should be benchmarked, if it's not that effective, then we shouldn't do it. so we're pretty specialized in making breakthroughs in those areas. >> you been involved in projects

all over the place from eradicating polio outside attorney to improving schools in cities and in rural areas around the united states. what you consider at this point given all other resources that you put into the support and projects to be your most important victory or your area of greatest success, and what did you learn from that? >> we've had the most success in global health. there's over 6 billion people alive today that wouldn't be alive if it wasn't for the vaccine coverage and new vaccine delivery that we funded. and so it's very measurable stuff. and, in fact, if you applied a very tough lends to our work, you can almost say, okay, why are you even involved in u.s. education? we have the recent that you could say is not all that numerical, which is that the success that i had, that melinda

had, came from the u.s. education system. it came from the u.s. system of encouraging innovation in business and protecting the intellectual property. we feel like we need to have, take what we think is the greatest cause of in equity, the greatest challenge to america's continued leadership in innovation, which is the failures of the education system, that we need to be dedicated to that even though the risk that we might not have a dramatic impact is much higher in network that it is in any of our health or agricultural or sanitation or financial service work, which focuses on the poor countries. we feel that it's critical that america did improved education, but that's very hard work. over the last 20 years, where government spending in this area and philanthropic spending, although it's a tiny percentage,

has gone up dramatically, the proof in achieving in terms of reading ability, that ability, dropout rates, kids graduating college, there's been hardly any improved at all despite massive resource increases that have gone into the area. so it's critical, but it's not easy and there's no proof that it's necessarily going to be dramatically better 10 or 20 years from now. >> so let me ask you about that entrance just set of problems that we have in u.s. education. i understand there are certain problems you can eradicate the guinea worm. you can't miss is to eradicate ignorance. just as here at aei we're trying to improve the free enterprise system. that doesn't mean we'll be done at some point. that's just the nature of social enterprise. here in washington, d.c., we talk about public education all the time. this is the capital of the free world. we should have the best education system and it should be an exemplar to the whole world. we should agree.

we are pumping more than $18,000 per year kid per year in the system. 15% of eighth graders read at the national acceptable standard. so what do we do? >> it is phenomenal the variance and how much is spent per student. utah is below 6000 per student per year. a lot of states are in the $7500 per student per year. you got some to spend more than d.c. new jersey would spend a bit more. the northeast as hell is with the biggest spending takes place. and yet there is no correlation between the amount spent and the excellent that comes out. yes, massachusetts is good, that if you take the high spending states as a whole, then you get pennsylvania, new jersey, washington, d.c. mixed into that and it doesn't look like there's any correlation. that it's a very strange system. washington, d.c., on a relative basis i can has improved a fair

bit over the last three or four years, a combination of improved personnel policies, shutting some schools, letting the charter schools take a somewhat higher share of the cohort. it's about the fourth largest of all the districts in the nation, new orleans being number one in terms of the percentage kids go to charter schools. the charter schools are on average are quite good. there are some things that have gone well, but it's still an abysmal system. and the fact that there isn't more of a consensus on what should we be doing to the personnel system and using innovation to, say, be almost as good as the countries in asia, it's got to be a concern both from antiquity point of view and from an overall country competitiveness point of view. >> so is spending more money is not the answer, i mean, it would be great if it were, because as

a rich country we can do that. but there are innovation ideas about choice, charters, et cetera. if it's the disruptive innovations that are going to make it happen, how do we inject those ideas were systematically into public bureaucracies, not just in schools, that in government in general? >> if you look at the education system, the amount of actual research that goes on to understand why some teachers are so extremely good, giving their kids more than two years of math learning in a year, and why the teachers who are at the other extreme, giving less than half a year of learning in a year, why we are not taken as best practices and at least trying to transfer those into the other teachers by doing observation and feedback, you know, having to schools of education really drive for high quality teaching,

it's not a personnel system that right now is focused on teacher improvement. teachers get almost no feedback. they get almost no sense of, okay, i'm good at this and i should share that with other people. i'm not very good at this, and, therefore, i should learn from other people. it's very different than most other so-called professions. and at the same time technology is coming along that in terms of taking the classroom video and sharing it, having people come into contact, delivering personalized learning to your kids so that you can assess what each of them are into lessons going to what they're having challenges with. the opportunity is there and that's what our foundation invests in. it invests in standing that very, very good teachers. we took 20,000 hours of video and look at various measures, what were they doing differently? and we created a lot of model districts where there aren't so-called.

evaluators were in the classroom observing, getting feedback. it looks like the results are very good and there are points of light that if we could get it adopted permanently and scale it up, it would start to move the dropout rate and the math and reading achievement. as you say, it's tough because when we invented the malaria vaccine no school board gets to vote to unindent it, whereas if you make an advance on personnel system, senator alexander, when he was governor of tennessee in the 1980s, did a pretty good system where people get feedback and evaluation. it look like it was starting to work pretty well, and yet it disappeared. >> the malaria virus is not unionized. and -- excuse me, i'm sorry. that's not my place. please.

[laughter] spent okay, i certainly agree that there are various groups that can stand for the status goal. would want to come in and change things, they are worried not as much for the students, but for the teachers. so they can defend the status quote. but if it was the case in america that the less unionized places were like singapore and the more unionized places were poor, and if you have some direct thing and said okay, here it is, and now we can explain it, that would be one thing. that is not true. our education is very poor across the entire country, and it does not correlate to unionization. massachusetts, pretty heavily unionized, they be relatively better. some other place is not unionized like, actually on an absolute scale, okay, take arizona. it isn't. there is no single factor you can say that in the 50 states, when it's been removed, financial constraints, union

constraints, that something like asia is taking place. >> let's go back outside the united states just for a minute begin. you wrote in your letter that there's a lot of misunderstanding about u.s. foreign aid. now, if you read the people running about aid, there are a lot of critics who think it's just hopelessly ineffective. some think it's possibly constructive. what's the misunderstanding about foreign aid from your point of view? >> whenever we give foreign aid, you have to, for any particular grant, say what your goal is for that grant. if your goal is famine relief, then you should measure the grant by whether people have been starved to death. you shouldn't go in and say okay, debt to gdp go up? if you're kind of a political friend like, you know, you want egypt to sign a treaty can be a friend and that is your goal, then you're not measuring the

dollars according to human development, then don't come back later and say, oh, their gdp didn't go up we didn't achieve human development. so as the foreign aid, things are labeled foreign aid, to take an extreme case like sending money to mobutu when he was the dictator as i year, it was labeled for a but it was a joke that people act like well, yeah, that's going to help the people in that country. now because you don't have that cold war imperative, a lot of the aid is actually trying to uplift their health or agriculture, you know, get these countries to self-sufficiency. and so the aging or does a lot more measurement. we've learned. we've a lot more rich countries. korea was a huge recipient. now it's turned red and is a very significant donor. you have more rich countries giving to far less poor countries. china, brazil, mexico, thailand,

they were aid recipients in varying degrees. now they are no longer aid recipient. india, the aid it needs is very targeted. a very small part of it is gdp. within 10, 15 years they won't need to be an aid recipient. so this is a field that makes advances. when you label it aid, it seems mysterious. when it comes to inventing deceits of the gree green revoln that avoid famine in asia or the smallpox eradication that was a u.s.-led effort, that it is these was killing 2 million people a year hasn't killed a single person since 1979, when you look at that and you say was that worth it? well, i guess it was worth it. there are so-called global public goods creating seeds common medicines for vaccines for these infectious diseases that the normal market mechanism does not work. that is, it's not rational for a profit-seeking company to do a

malay vaccine because there is that even though it kills a million children a year, the parents of those children don't have enough money to justify the research. and so it's a market failure. markets are in a good. they are the best mechanism we have. the more you can use them, whenever you can use them, that's one of the key mechanisms along with science and government that have led us to be so much better off than we were hundreds of years ago. but for the diseases that we work on, there is no -- the r&d would not show up except for government aid and philanthropy. >> well, so your philanthropy is working alongside government aid to be sure. and you show that in your letter and we know now for a long time but there are a lot of people who believe very strongly that the presence of philanthropy like yours is evidence that the government simply isn't doing enough to help people. i'm going to quote ralph nader,

who once said that, that's not a lifeline, u people. [laughter] a rowdy crowd. route nader once said, a society that has more justice is a society that needs less charity. what do you say to that? >> you don't want to depend on charity for justice. charity is small. i mean, the private sector is like 90%, and government is like 9% and philanthropy is less than 1%. there are things in terms of trying up social programs in innovative ways that the government is just, because of the way the job incentives work, they're not going to try out new designs like philanthropy can and they're not going to volunteer hours coming in to leverage the resources like philanthropy can. so philanthropy plays a unique role. it is not a substitute for government at all. when you want to give every

child in america a good education or make sure they're not starving, that's got to be government because philanthropy is in their day in and day out serving the entire population. it's just not of the scale or the design to do that. it's fair to try out things, including funding disease research or, you know, academic studies to see if something is more effective. so i would agree with that nader quote. if you want broad justice, you had better be doing that through government mechanisms. >> does that mean that we need less charity, however, if we have enough just to? >> i guess if you have a perfection, then you don't need charity anymore. charity plays a huge role in america. our university is one of the reasons that they are world-class, is because there's a tendency of the graduate students to do well to get back to the universities. that is the envy of the world.

every of the country is time to think okay, how do they get this magic cycle going where they create successful people in the universities and then to help make those universities the a lot stronger? in terms of very scientific ideas, you know, hughes medical foundation, this is a whole ton of things, rockefeller foundation if you go back in time, they invented things that the government research projects were not moving into this area is, not doing that were. the march of dimes invented the polio vaccine. the thing that we are using to go out and eradicate, make it the second disease after smallpox that gets eradicated, this is the oral polio vaccine. that's 10 doses, this things -- this thing costs $1.30, so 13 cents per kid. that was philanthropic money, march of dimes money, that caused both its predecessor called ip, which was the salt

shot, this is the sabin oral. they greeted those things. so philanthropy has some amazing hits to go along with possibly that was probably wasted. >> there's a related question to my last one, which is the number of people who talk about charity and free enterprise as if they were in conflict. they believe that capitalism, that people who trust capitalism because they don't believe the charity is a good solution to problems, et cetera. in other words, there's an antagonism between markets and nonmarket mechanisms that are philanthropic, how do you square those? i think think i understand whae your your thoughts on that as well, given the fact you've involved in one of the most important capitalistic endeavors in history of our economy as was the biggest foundation in our country. >> once you get past basic research and drawing the boundary of how much is government funded and how do you define that is a tricky area. it is a market there for research as a whole, not just

research for the poorest. but once you get past that, most innovation is driven by private enterprise, the magic of the chip, the optic fiber, software, the magic of new drugs, new vaccines, all of that stuff. how you come up with it, how you make it safe, that's happening in private enterprise. so being able, for our foundation where we are trying to help the poorest, our relationship with the pharmaceutical companies has been fantastic. and it's great, every time they are successful, they come up with a new drug, and managed to keep profitable because of that, that's great for us because it means they're going that awful bit more understanding to help us with our issues and a little bit more on the way of resources, all totally voluntary on the part to pitch in. and so the private sector, we've got to bring private sector

agriculture in all of these countries. that is the ultimate sustainable solution. charity, as i said, won't be there all the time. government aid will be there all the time. the question is how to get out of the poverty trap? right now 40% of the kids don't come in africa, don't developmentally so that they could ever, say, be fully literate. that is through malnutrition, treatable malaria, a variety of health insults, they are not achieving anywhere near their cognitive potential. and so do you need to go in and remove that barrier, that friction, in order to get them into a sustainable situation? in africa, and particularly the disease burden, the way the geography works, the split of of ethnicities, it spent in the toughest problem, to create countries that are totally self-supporting, you know, running a middle income or above democratic type system. but they'll get there, but they

for a friday of reasons will be the last, most of the last to achieve that. >> philanthropy can stimulate the mechanism of free enterprise which then become sofas in and help these people will be on the scope of your foundation or any bit of government aid? >> yeah, absolutely. the poor farmers, the real solution for them is to be farmers were in the marketplace summit in of other produce to diversify the died other kids, to be able to buy for school uniforms where those are necessary, and even when a tough year comes along to have saved up enough that they are not starving during the year where the weather is working against them. >> people think a lot about leveraging technology in international development. we hear about that constantly, the big headlines like if every child a laptop, et cetera. and these are great ideas. what i want to know is from your point of view, what's the most

exciting opportunity for technology to change allies today? >> i think the greatest injustice in the area of health. and that's my bias. that's the area that i spend time in. i think a child dying is an injustice no matter where that takes place in the world. this is another one of those good news stories that's not well known. in 1960, 20 million children a year under five were dying a year. now we are down below the 6 million. we have over twice as many people in that age cohort, so the rate reduction is pretty phenomenal. and we can see a path, by working on diabetes, pneumonia, malaria, we can see a path to get that over the next 20 years below 3 million a year. and so at the same time as you do that you are not on reducing deaths but taking all these kids who survived and yet don't survive intact. that is, their brain never fully

develops, their body never fully develops. and you reducing that quite dramatically. and so i would say health is a necessary condition to get a country to have kids who, when they go to school, they can learn to read and, you know, therefore, it's the thing we've chosen as the big priority and i think will unlock the potential of these countries. >> so a lot of us in this room are probably looking at your incredible successes and thinking, you know, if i could construct the world's largest foundation, i could do a lot of great things. but for the rest of us, who can't do that, you must have thought about how each one of us can make a difference as well. what kind of device do you give to everybody who wants to act philanthropic lead notwithstanding the limits on their own personal resources the? well certainly, ticking that caused of iniquity, whatever it is, pick a local charter school,

pick a disease that somebody you know was touched by, though out to a poor country and see what's going on with the health or education there, you know, all these problems require volunteer hours, expertise, somebody who is articulate. and a lot of people get frozen just saying that the need is infinite and say okay, when i picked would be the best pick? there's no sort deeply rational way we're going to have time to enumerate all the things you could work on and compare also sacked and then jump into that. it's best where ever you can get your passion engaged to pick something and jump in. for most people for for stovetop thing they'll do will be something in their neighborhood where they can go and put their hands on it, meet the kids at the charter school that they're volunteering their time, meet the kids that their mentoring and see the progress that they're making.

if you could connect up with the poor countries, the marginal impact of your time or even pretty small resources is higher in many cases than anywhere else you're going to look, but it's harder to access that and forget how you're going to stay involved in a sustained way. ..

with these particular resources getting a sense of the good we are creating. i appreciate that advised. i want to turn out to some of our colleagues here and start with one of our colleagues from education. your foundation is generally made it possible for us to do a lot of reform work on k-12 education and higher as well. i want to go to make machine who is over here. mike has got a question coming up all over twitter and across our e-mail, something that would ask a question. >> thank you one question. but, core curriculum standards has become increasingly controversial. the question i have is why? what promise do you see the common core standards? had used either as a lover for education system? >> okay, so what is the common core?

is a very simple thing. it is a written explanation of what knowledge kids should achieve at various milestones in their educational career. so in sixth grade which mappings should you know? in ninth grade which matt think she do you know? and you might be surprised to learn how poor those daschle called the standards, but the clear it's not curriculum. it's not a way of preaching. but it's writing data, should you doubt this part where should you know trigonometric functions? to gpo to recognize the graph of this type? do not very well is hard because they are certain dependencies. if you teach at the wrong order, if you try and teach too much at once, too much too early cavorts the u.s. is doing a lot of that, it can be very, very poor. if you care, we had 50 of these

things and there is quite a bit of divergence. some states had trigonometry, some didn't. of that pie charts, some didn't. so ironically, what happened is the textbook companies had gone in and told the committee that make these things that they should add things over time. so we have over double the size of any of the asian countries and we have the order and all must every one of our 50. you think you'd have 50, one of them is randomly really, really well order. some are more ambitious. for example, be it high, having the 12th grade expectation be high, there were a few like massachusetts who are quite good and that was back. so when kids from massachusetts teach international tennis or s.a.t., they do better.

better than the rest of the country. often when you see those rankings, they'll take massachusetts and show you where we should be and it's way past the u.s., but now is virtually at the bottom of any of the well-off countries. with the asian countries totally dominating the top six slots now. finland had a brief period where they were up high. now they are not even the european leader anymore. so a bunch of governors said hey, you know, why are we dying textbooks? why are they getting so big? i think it is the national governors association said we are to get together en masse. a bunch of teachers met with a bunch of expert spirits are reading, writing and math, these knowledge levels were written down. at some point, 46 states that adopt it that.

curriculum of frightening competitive curriculum now the small companies can get into it because it's not just doing a book for florida. so this sort of barrier by the large firm goes away. the idea you can't use the old textbooks, that will go away. and math, this can have real durability. changing, not like some new form of math that's been invented. there has been an international expectation when you take the s.a.t. test, as trigonometry. if you're in a state that doesn't have that come you're going to get a low score. the is a certain notation in certain states were different than that. if you move from state -- >> different vernacular. >> -- you experience

discontinuity because of that. this may hard to compare things. this is an area where we have on academy trained to be a national resource and yet you sit down and i'll tell you or you have to do six grade level clicks are grouped in ninth grade level? are you able to graduate from high school? so this common core was put together. if somebody -- states will decide this thing. nobody's suggesting the federal government will even in this area, which is not curriculum, will dictate these things. states can opt-in. they can opt-out. as they do that, they should look at the status quo, which is poor. they should look and find something of high achievement that's got quality and my something if they have to they are comparing, they have to pick some thing because to some degree this is an area or if you do have commonality, if they

cannot all cause, you get more premarket competition. scale is good for free-market competition. individual state regulatory capture is not good for competition. and so this things there in terms of driving innovation you think that pro-capitalistic driven people would be in favor of it, but somehow it's gotten to be controversial. states will decide. whatever they want to decide to sign. at the end of the day the quality you are teaching, when your kids go to take what our national level tests, whether they are going to do well or not too well. >> speaking of competition promotes good competition outside the united states that helps people who are poor. i want to turn to paul wall awaits now.

>> thinks very much for coming. it's terrific to have you here. as a quick comment and a question. the question is about trade, but the comment is about waste in foreign aid. the amazing work you're doing demonstrate that there are lots of ways to spend foreign aid that are the opposite of wasteful. they're accountable, measurable, make a huge difference in people's lives. to submit there is a lot of ways. i give you an example. if you give $100 million to a government that is so tyrannical that you have no idea what happened to that money, by your numbers that's $100 million that could have saved 50,000 lines. you'll have a stronger case for foreign aid if you go after the things wasteful as well as things that are good. here's my question. i'm talking about foreign aid come you correctly say we spend less than 1% we could afford to spend more agricultural

subsidies. the agricultural subsidies are just a waste of money. they are making a harder for poor countries to export the products their natural advantages for beta two, which is agriculture. i wonder what you think about oracle cultural subsidy system and what its impact is on the poor countries you visited in terms of trade opportunity. >> well, we certainly distorted the market in agriculture prices. there's some cases where it's fairly extreme like sugar in some cases where it's more modestly big cereal. and i forgot, there's a few things like cotton, horticulture, where you can make a clear case that the dumping out of the reach country because of strange subsidies actually its effect in their income. they are not yet as competitive

in the big value crosses they need to be. we have a lot of work to do. africa right now can barely eat itself. the huge rise in productivity is called the green revolution. more than two increase in asian never happen in africa because it has unique ecosystem. even weizen meet with very low productivity is very flexible with conventional breeding and with gml type breeding to give much, much better themes. the effect of trade barriers we fixed african agriculture or, then the numbers will get very, very large. you know, it's just too bad that europe in the u.s., and japan compete to distort those markets. it doesn't look like there's going to be any change or not. ascot mispriced insurance, but it still money and as you say,

he reduces some level of efficient in terms of who should be providing what. >> one of the most striking statistics i've seen as an economist comes from -- at columbia university, who knows that since you and i were kids, the percentage of the world population living on a dollar or day lessers declined by 80%. just amazing. this question is related to that encounter marcon ms, michael strahan, who says the spread of free enterprise has dramatically reduce the share of the world living on a dollar a day less. standards we've had since we were kids is not the right standard. you're looking at 2035 to wipe out average poverty across 10 countries in the world. what should the standard be? how should we be thinking about it to update this measures? >> any single measure isn't

going to capture what needs to go on. the extreme poverty line now is $1.25 a day in the poverty line is $2 a day. you can certainly argue that they should be a bit higher than not. also, the way gdp is measured in poor countries is extremely random. not random. it's inaccurate. there's a book by germans called that number is that talks about, for example, for a subsistence farmer, what are you putting into the gdp number? you don't have some market transactions. there's a book or charles kenny, the getting better but that talks about the fact gdp misses a lot of things. if something comes in like a measles vaccine for increased literacy, that improvements in human condition doesn't necessarily show up in gdp at

all. in fact, they're radical advances in health during a 30 year period that gd -- a gdp per person at zero, not at all. you want to put into a human development impacts, gdp, maybe in a mortality, you'd like to put in something about education, something about freedom and people like molly abraham have a variety come in this case, mostly governance measures that i think are throwing light on these things. there's still more to be done to capture this. gdp, if you have to pick one single thing, i would still say it is the measure. even within rich countries, you do have relatives poverty. the idea of t. worry about getting enough to eat if you have a medical condition, can

you expect to get treatment? there are things like that but even if the economics look okay, you know, you shouldn't be satisfied. so the appeals of the economist, giving themselves a hard time about how weak these measures are, or the next day there could be a real contribution to how we look at well-being beyond gdp. >> let's talk about poverty right here in the united states a little bit more. i want to turn to my colleague, robert dorr. >> thank you very much for coming in thank you for all you do for people around the world. poverty in the united states is often related to employment and economic growth. i wanted to test your optimism a little bit and i spoke to could get back to a 4% annual gdp growth in the united states and if so, how?

what would be the key thing to make that happen. >> you now, i am not a fan of the way timeseries adjustment for comparing gdp between various points, i think it meaningfully understates the rate of progress. if you take how you get is, your ability to get ms. commissars gdp concerns, it's simple and less people, less money. are you impoverished in terms of your ability to search and read articles today versus a 30 years ago? probably not. buying encyclopedias. my parents bought a world. i read it. we had to learn the world alphabetically. a very weird way to learn names. now, every kid has to have wikipedia. so whether it is in the area of

technology or madison are various things, there's a lot of the qualitative nature that's not in most things. so whether the great close up or not, the improvement livelihood will be very rapid in the future. i do think tax structures will have to move away from taxing payroll because society has a desire to have employment. of all the inputs, wood, coal, plastic, cement, there is one that pays a special service and then his labor. the fact we've been able to tax labor as opposed to capital or consumption just as the demand for labor was good relative to other things. technology in general will make capital more than labor overtime. proper substitutions, whether it's for drivers or readers or nurses or whatever you do --

[laughter] >> we wonder that, too. >> it's surprising. and that is going to force us to reach inc. how these tax structures work in order to maximize employment, you know, given that capitalism in general overtime will create more inequality and technology over time will reduce demand for jobs particularly at the lower end of the scale said. you know, we have to adjust in these things 20 years from now, labor demand for skill sets will be substantially lower. i don't think people have said in a mental knowledge. >> so aligning incentives in the economy to move away from taxing labor in moving to something like a progressive consumption tax is a smart thing to do to stimulate economies that are lined?

>> i think the consumption tax is a better point at any point in history. it's even more important as we go forward because the distortion -- i want to distort in the favor of labor. not only will they not tax labor, and fake earned income tax credit -- when people say we should raise the minimum wage, i know some economists disagree, but i worry about what that does to job creation. the idea that 3-d income tax credit you would end up with a certain minimum wage that you perceive, that i understand better than potentially damping demand in the part of the later spectrum that i'm most worried about. >> something like a guaranteed minimum income for people working full-time for an expansion of the eit fee or wage subsidy seems like the right way to go. >> i didn't get time to look it

up last night -- [inaudible] [laughter] >> now, looking at consumption rather than income because income is complicated. if i'm a student has make you no income, but investing in that capability, my income looks funny. if i'm a traitor who has a bad year, my income looks funny. consumption really is what you care about. so when people say you should feel guilty because you have so much money, well, it is not that i have money. it's my consumption. if i'm supposed to feel guilty it is my consumption. the part really is in a sense assuming we are smart about getting it to benefit them. the idea that consumption should be progressively taxed, that makes a lot of sense. people have tried to do that by doing particular electric goods.

that's not very effective at picking favorites type things. consumption should be progressively tasked and we should understand the inequality of consumption is more than a number in a book. >> inequality of consumption is the real inequality we should be worried about. i would suppose he would also say in equality of opportunity is the greatest dignity. i am sort of paraphrasing. is that fair to say? >> absolutely. we should understand in equality of opportunity and inequality of consumption way better than we do today. >> way. we've got a lot of interactions with dignitaries from india. we just had the dalai lama. we have a very prominent guru who has many, many millions of followers here. we're talking the indian issues

in particular. sonata jimmy has a question about that country. when you look to your engagement with the country, would he think it's done well and where do you think it needs to be the most where? >> well, india have a lot of very socialistic policies have a duty with labor and land. as a manufacturing power is an indictment of a policy. the place that the world should move to next as a manufacturing hub of the world absolutely should be india. that happened to a very, very tiny extent it has to do with regulatory complexities, infrastructure quality. i'm optimistic about india.

we put more into india than in a country the world. india benefits from a funny form of competition, which is competition between the states. so when one state really gets its act together, the other states tend to feel jealous and are kind of looking at what policies led to that. the seats in the north were particularly focused on in every human development numbers as well as income, but the improvements can be the big partnership with chief minister behar, the new chief minister and crash decided that these things we care about he would get very involved with. it seems a very fast rate of improvement there. vaccination coverage. we got the last polio case there was three years ago, and we've taken the polio quality turned

into a primary health care audit group looking not toward a supply chain out where? india's health is very complicated because they have a lot of private sector that is very low quality. the government hasn't figured out how to get the private sector to be high-quality and yet they haven't built capacity in the public sector. but things are on our side in vienna. it's just frustrating to have a few new vaccines. there's two new vaccines will save over 400,000 lines per year in just india alone and there being quite slow on that issue. so india is great. in 15 years, will probably be out of india because its budget will get bigger and and a lot more of it to.

>> what results the delays in preventing and what goes to that? the viruses they are. >> the suspicion -- the bureaucrats really like the status quo. the way the career system works, you are much better off not to change things. so getting somebody to say yes, we like to spend more money on a new vaccine come in knowing there's a crowd that's going to come in attack that. there's a little bit of conservatism. there's an election coming up hopefully that if you get close to an action, we get particular policies in the bureaucracy. the election has a lot of optimism that things will both in terms of deregulation and taken on new health initiatives that things will be even more aggressive. >> your work all over the world is in so many facets in

different areas. i asked you to service sample and things who are proudest of the greatest successes. i suppose i should ask your boss what do you think either of you that your greatest failure is that what you learn from that. >> well, we fail all the time because of a back scientific approaches for creating vaccines and drugs that fail. we did a thing in education, which was changing the high school sides to be more like 41500. that is really created a community where they had an expert patient about the kids were doing. that actually had good results. a race attendance, lowered violence at this completion rate about 15%. what he didn't do on any meaningful level was raised the education level of the kids graduated. and so we call the college

readiness. we had the view of the reading, writing, math skills on graduation. it hardly looks bad at all. the four year degree. and so we step back and say we have to get involved with helping teachers be more effective. we've got to learn about why the teachers in this country are not being tested. it's a failure of the sense that our high goals of completion are not going to be achieved. the kids are all better off in the smaller schools, measurably better off than they had in the gigantic high school. >> the reason that is an encouraging lesson is that you

learn something and you didn't adhere dogmatically to which you wish worked, but rather than what didn't work. are you able to take this lesson to public policy makers who are able to say that public policies they wish worked at manifestly don't? >> well, public policy -- we need more people examining effective ways to achieve public policy goals. it is unfortunate that a little bit the idea of making things more effective in getting rid of things, those are, you know, separate issues. so there should be a class of people who say okay, in terms of helping with deprivation in america, could we buy having less vertical programs may be achieved that reason be neutral about it for the same amount of money we spend today. as a separate question, are we spending too little or too much?

because the complexity of improvement is high, gathering data, trying things out in political dialogue isn't very good and very complex things. a lot of the air time, instead of the devout relative approach is about more or less, more or less. take health care costs. you know, left, right, center. show me your best ideas for bending the health care cost per. just getting rid of something, is not going to bed the health care cost curve. what is the supply demand equation, the nature of the professional rules? the nature of the innovation pipeline? i think they are seekers of ideas better be really discussed the really two other than education may be the biggest government budget issue we face, which is are those health care costs going to crowd out every

other government function? >> theses submitted from one of our friends by e-mail. the gates foundation divides between philanthropic priorities here, the united states and overseas. there is a real need and that's a lot of inequality opportunity and consumption inequalities you and i have discussed here at home. so this is a question that the execution of philanthropy. how do you decide how you allocate resources retrieved the computing means here in the united states and overseas? >> melinda and i picked two things. we picked what we thought was the greatest inequity in the country that had created the conditions that allowed us to have this outside success in the education, both k-12. what is the greatest inequity?

it's around global health and that's expanded today. nazca sanitation, agriculture, financial services, career for additional things that are there to help uplift the poor. we've got two centers of the committee. you do have to specialize in so far education has been our big domestic. we did a few other things. we do bury bitter things locally in the seattle area or washington state. the big thing is an education. >> i want to turn out to my colleague, john making. >> if you could put your statement in the form of a question. [laughter] >> yeah, well we have two things in common. i spent a lot of time in seattle. teach in at are revolutionizing the world. and we