Understanding the rise of China | Martin Jacques

The world is changing with really remarkable speed. If you look at the chart at the top here, you’ll see that in 2025, these Goldman Sachs projections suggest that the Chinese economy will be almost the same size as the American economy. And if you look at the chart for 2050, it’s projected that the Chinese economy will be twice the size of the American economy, and the Indian economy will be almost the same size as the American economy. And we should bear in mind here that these projections were drawn up before the Western financial crisis. A couple of weeks ago, I was looking at the latest projection by BNP Paribas for when China will have a larger economy than the United States. Goldman Sachs projected 2027. The post-crisis projection is 2020. That’s just a decade away. China is going to change the world in two fundamental respects. First of all, it’s a huge developing country with a population of 1.3 billion people, which has been growing for over 30 years at around 10 percent a year. And within a decade, it will have the largest economy in the world. Never before in the modern era has the largest economy in the world been that of a developing country, rather than a developed country. Secondly, for the first time in the modern era, the dominant country in the world — which I think is what China will become — will be not from the West and from very, very different civilizational roots. Now, I know it’s a widespread assumption in the West that as countries modernize, they also westernize. This is an illusion. It’s an assumption that modernity is a product simply of competition, markets and technology. It is not. It is also shaped equally by history and culture. China is not like the West, and it will not become like the West. It will remain in very fundamental respects very different. Now the big question here is obviously, how do we make sense of China? How do we try to understand what China is? And the problem we have in the West at the moment, by and large, is that the conventional approach is that we understand it really in Western terms, using Western ideas. We can’t. Now I want to offer you three building blocks for trying to understand what China is like, just as a beginning. The first is this: that China is not really a nation-state. Okay, it’s called itself a nation-state for the last hundred years, but everyone who knows anything about China knows it’s a lot older than this. This was what China looked like with the victory of the Qin Dynasty in 221 B.C. at the end of the warring-state period — the birth of modern China. And you can see it against the boundaries of modern China. Or immediately afterward, the Han Dynasty, still 2,000 years ago. And you can see already it occupies most of what we now know as Eastern China, which is where the vast majority of Chinese lived then and live now. Now what is extraordinary about this is, what gives China its sense of being China, what gives the Chinese the sense of what it is to be Chinese, comes not from the last hundred years, not from the nation-state period, which is what happened in the West, but from the period, if you like, of the civilization-state. I’m thinking here, for example, of customs like ancestral worship, of a very distinctive notion of the state, likewise, a very distinctive notion of the family, social relationships like guanxi, Confucian values and so on. These are all things that come from the period of the civilization-state. In other words, China, unlike the Western states and most countries in the world, is shaped by its sense of civilization, its existence as a civilization-state, rather than as a nation-state. And there’s one other thing to add to this, and that is this: Of course we know China’s big, huge, demographically and geographically, with a population of 1.3 billion people. What we often aren’t really aware of is the fact that China is extremely diverse and very pluralistic, and in many ways very decentralized. You can’t run a place on this scale simply from Beijing, even though we think this to be the case. It’s never been the case. So this is China, a civilization-state, rather than a nation-state. And what does it mean? Well, I think it has all sorts of profound implications. I’ll give you two quick ones. The first is that the most important political value for the Chinese is unity, is the maintenance of Chinese civilization. You know, 2,000 years ago, Europe: breakdown — the fragmentation of the Holy Roman Empire. It divided, and it’s remained divided ever since. China, over the same time period, went in exactly the opposite direction, very painfully holding this huge civilization, civilization-state, together. The second is maybe more prosaic, which is Hong Kong. Do you remember the handover of Hong Kong by Britain to China in 1997? You may remember what the Chinese constitutional proposition was. One country, two systems. And I’ll lay a wager that barely anyone in the West believed them. “Window dressing. When China gets its hands on Hong Kong, that won’t be the case.” Thirteen years on, the political and legal system in Hong Kong is as different now as it was in 1997. We were wrong. Why were we wrong? We were wrong because we thought, naturally enough, in nation-state ways. Think of German unification, 1990. What happened? Well, basically the East was swallowed by the West. One nation, one system. That is the nation-state mentality. But you can’t run a country like China, a civilization-state, on the basis of one civilization, one system. It doesn’t work. So actually the response of China to the question of Hong Kong — as it will be to the question of Taiwan — was a natural response: one civilization, many systems. Let me offer you another building block to try and understand China — maybe not sort of a comfortable one. The Chinese have a very, very different conception of race to most other countries. Do you know, of the 1.3 billion Chinese, over 90 percent of them think they belong to the same race, the Han? Now, this is completely different from the world’s [other] most populous countries. India, the United States, Indonesia, Brazil — all of them are multiracial. The Chinese don’t feel like that. China is only multiracial really at the margins. So the question is, why? Well the reason, I think, essentially is, again, back to the civilization-state. A history of at least 2,000 years, a history of conquest, occupation, absorption, assimilation and so on, led to the process by which, over time, this notion of the Han emerged — of course, nurtured by a growing and very powerful sense of cultural identity. Now the great advantage of this historical experience has been that, without the Han, China could never have held together. The Han identity has been the cement which has held this country together. The great disadvantage of it is that the Han have a very weak conception of cultural difference. They really believe in their own superiority, and they are disrespectful of those who are not. Hence their attitude, for example, to the Uyghurs and to the Tibetans. Or let me give you my third building block, the Chinese state. Now the relationship between the state and society in China is very different from that in the West. Now we in the West overwhelmingly seem to think — in these days at least — that the authority and legitimacy of the state is a function of democracy. The problem with this proposition is that the Chinese state enjoys more legitimacy and more authority amongst the Chinese than is true with any Western state. And the reason for this is because — well, there are two reasons, I think. And it’s obviously got nothing to do with democracy, because in our terms the Chinese certainly don’t have a democracy. And the reason for this is, firstly, because the state in China is given a very special — it enjoys a very special significance as the representative, the embodiment and the guardian of Chinese civilization, of the civilization-state. This is as close as China gets to a kind of spiritual role. And the second reason is because, whereas in Europe and North America, the state’s power is continuously challenged — I mean in the European tradition, historically against the church, against other sectors of the aristocracy, against merchants and so on — for 1,000 years, the power of the Chinese state has not been challenged. It’s had no serious rivals. So you can see that the way in which power has been constructed in China is very different from our experience in Western history. The result, by the way, is that the Chinese have a very different view of the state. Whereas we tend to view it as an intruder, a stranger, certainly an organ whose powers need to be limited or defined and constrained, the Chinese don’t see the state like that at all. The Chinese view the state as an intimate — not just as an intimate actually, as a member of the family — not just in fact as a member of the family, but as the head of the family, the patriarch of the family. This is the Chinese view of the state — very, very different to ours. It’s embedded in society in a different kind of way to what is the case in the West. And I would suggest to you that actually what we are dealing with here, in the Chinese context, is a new kind of paradigm, which is different from anything we’ve had to think about in the past. Know that China believes in the market and the state. I mean, Adam Smith, already writing in the late 18th century, said, “The Chinese market is larger and more developed and more sophisticated than anything in Europe.” And, apart from the Mao period, that has remained more or less the case ever since. But this is combined with an extremely strong and ubiquitous state. The state is everywhere in China. I mean, it’s leading firms — many of them are still publicly owned. Private firms, however large they are, like Lenovo, depend in many ways on state patronage. Targets for the economy and so on are set by the state. And the state, of course, its authority flows into lots of other areas — as we are familiar with — with something like the one-child policy. Moreover, this is a very old state tradition, a very old tradition of statecraft. I mean, if you want an illustration of this, the Great Wall is one. But this is another, this is the Grand Canal, which was constructed in the first instance in the fifth century B.C. and was finally completed in the seventh century A.D. It went for 1,114 miles, linking Beijing with Hangzhou and Shanghai. So there’s a long history of extraordinary state infrastructural projects in China, which I suppose helps us to explain what we see today, which is something like the Three Gorges Dam and many other expressions of state competence within China. So there we have three building blocks for trying to understand the difference that is China — the civilization-state, the notion of race and the nature of the state and its relationship to society. And yet we still insist, by and large, in thinking that we can understand China by simply drawing on Western experience, looking at it through Western eyes, using Western concepts. If you want to know why we unerringly seem to get China wrong — our predictions about what’s going to happen to China are incorrect — this is the reason. Unfortunately, I think, I have to say that I think attitude towards China is that of a kind of little Westerner mentality. It’s kind of arrogant. It’s arrogant in the sense that we think that we are best, and therefore we have the universal measure. And secondly, it’s ignorant. We refuse to really address the issue of difference. You know, there’s a very interesting passage in a book by Paul Cohen, the American historian. And Paul Cohen argues that the West thinks of itself as probably the most cosmopolitan of all cultures. But it’s not. In many ways, it’s the most parochial, because for 200 years, the West has been so dominant in the world that it’s not really needed to understand other cultures, other civilizations. Because, at the end of the day, it could, if necessary by force, get its own way. Whereas those cultures — virtually the rest of the world, in fact, which have been in a far weaker position, vis-a-vis the West — have been thereby forced to understand the West, because of the West’s presence in those societies. And therefore, they are, as a result, more cosmopolitan in many ways than the West. I mean, take the question of East Asia. East Asia: Japan, Korea, China, etc. — a third of the world’s population lives there. Now the largest economic region in the world. And I’ll tell you now, that East Asianers, people from East Asia, are far more knowledgeable about the West than the West is about East Asia. Now this point is very germane, I’m afraid, to the present. Because what’s happening? Back to that chart at the beginning, the Goldman Sachs chart. What is happening is that, very rapidly in historical terms, the world is being driven and shaped, not by the old developed countries, but by the developing world. We’ve seen this in terms of the G20 usurping very rapidly the position of the G7, or the G8. And there are two consequences of this. First, the West is rapidly losing its influence in the world. There was a dramatic illustration of this actually a year ago — Copenhagen, climate change conference. Europe was not at the final negotiating table. When did that last happen? I would wager it was probably about 200 years ago. And that is what is going to happen in the future. And the second implication is that the world will inevitably, as a consequence, become increasingly unfamiliar to us, because it’ll be shaped by cultures and experiences and histories that we are not really familiar with, or conversant with. And at last, I’m afraid — take Europe; America is slightly different — but Europeans by and large, I have to say, are ignorant, are unaware about the way the world is changing. Some people — I’ve got an English friend in China, and he said, “The continent is sleepwalking into oblivion.” Well, maybe that’s true, maybe that’s an exaggeration. But there’s another problem which goes along with this — that Europe is increasingly out of touch with the world — and that is a sort of loss of a sense of the future. I mean, Europe once, of course, once commanded the future in its confidence. Take the 19th century, for example. But this, alas, is no longer true. If you want to feel the future, if you want to taste the future, try China — there’s old Confucius. This is a railway station the likes of which you’ve never seen before. It doesn’t even look like a railway station. This is the new [Wuhan] railway station for the high-speed trains. China already has a bigger network than any other country in the world and will soon have more than all the rest of the world put together. Or take this: now this is an idea, but it’s an idea to be tried out shortly in a suburb of Beijing. Here you have a megabus, on the upper deck carries about 2,000 people. It travels on rails down a suburban road, and the cars travel underneath it. And it does speeds of up to about 100 miles an hour. Now this is the way things are going to move, because China has a very specific problem, which is different from Europe and different from the United States: China has huge numbers of people and no space. So this is a solution to a situation where China’s going to have many, many, many cities over 20 million people. Okay, so how would I like to finish? Well, what should our attitude be towards this world that we see very rapidly developing before us? I think there will be good things about it and there will be bad things about it. But I want to argue, above all, a big-picture positive for this world. For 200 years, the world was essentially governed by a fragment of the human population. That’s what Europe and North America represented. The arrival of countries like China and India — between them 38 percent of the world’s population — and others like Indonesia and Brazil and so on, represent the most important single act of democratization in the last 200 years. Civilizations and cultures, which had been ignored, which had no voice, which were not listened to, which were not known about, will have a different sort of representation in this world. As humanists, we must welcome, surely, this transformation, and we will have to learn about these civilizations. This big ship here was the one sailed in by Zheng He in the early 15th century on his great voyages around the South China Sea, the East China Sea and across the Indian Ocean to East Africa. The little boat in front of it was the one in which, 80 years later, Christopher Columbus crossed the Atlantic. (Laughter) Or, look carefully at this silk scroll made by ZhuZhou in 1368. I think they’re playing golf. Christ, the Chinese even invented golf. Welcome to the future. Thank you. (Applause)

Global governance and trade negotiations

in the world of international trade there are few officials who can match the insights perspective and analysis of Luis Felipe lamprey a mr. Lampe Raya has been involved in the work of the WTO and before that the GATT for many years serving as the Brazilian ambassador to the GATT serving as Brazil's foreign minister he led Brazil's trade policy for a very long time now today as vice chairman of the Brazilian center for international relations mr. Lemp Raya continues to devote his time and energy to matters pertaining to trade policy mr. Lemp Raya welcome thank you you had a center seat seat in the final stages of the Uruguay Round and you helped create the framework of international rules that's in place to this day how would you assess the results of the Uruguay Round four Brazil specifically but in general for developing countries and for the trading system I think that nobody in 1994 could expect that the WTO would be as big success as it has been basically because I think it has created a culture of multilateral management of international trade and a set of rules that function as a let us say a barrier against protectionism we have just seen now with the crisis major crisis that we went through or are going through that nobody really embarked upon a protectionist course because I think fundamentally the WTO is the base for the international system of law you know and i think that one must be very proud of the water the w has achieved and i am personally very proud of being part of that births you know like dean acheson you see present at the creation but there are those who say that perhaps the Uruguay Round did not deliver as much as it could have or should have for developing countries do you share that assessment I don't know because as a matter of fact first of all you had a different distribution of power in 1994 then you have right now the developing country were much less of a force than they are right now second because the main achievement we were always very much aware of that was the dispute settlement mechanism and this was a way that developing countries could expect to have a attribution of rulings of adjudication in cases where they would never have the bargaining power bilateralism to expect a success you see you you mentioned dispute settlement and obviously that's very different under the WTO then under the gap but but in other ways how were the two organizations different well I think the GATT was was an institution that had its merits of course it contribute to very substantial liberalisation of trade but basically among developed countries and developing countries were playing very much minor role in the Gatun i think in the tablet you that's a completely different story yes the the Doha Development Agenda perhaps is emblematic of this it's the first negotiation dedicated to improving the prospects for developing countries in the multilateral trading system what what do we need to achieve in this negotiation to ensure an outcome that will really be beneficial for developing countries well from Brazilian point of view I must answer you thats agriculture is the main area where action should be taken as matter of factly cultures being most of the times let's say the weak link and the whole system the one where most bearers persist most subsidies most trade distortions persistent in the world in general to be compared to manufacturers for example so I think that's the number one thing and that can be to the benefit of all developing countries not necessarily it is a truth you know to develop because of course it must be done in a balanced way but it can be a very important tool for social progress like it has been in Brazil you know Brazil is a different country now from with what it was 25 years ago basically because of the progress and modernization of Agriculture some commentators say that this negotiation the Doha round which is now the longest multilateral negotiations that we've had that it's too complex it's taken too long it moves too slowly there are too many actors do you think that we need to consider reforms for future negotiations that might make this process a little easier well of course it becomes have a more complicated to have a larger number of countries agreeing to single undertaking isn't it and having more complex methods always on the table to discuss in to agree upon you see so there's no question that this this happens it maybe if we are unable for some reason and I think basically at this moment the problem is in the United States the ball ballpark I think that we are probably going to have to explore some avenues under the basic WTO framework but maybe explore some areas that do not involve necessarily single undertaking approach you know like a unilateral understanding o or who coalition of countries who have the intention of doing sectoral agreements or so on when the Doha round was launched in 2001 the world was a very different place there are those who say that perhaps the agenda should have been modified or modernized that perhaps there are other issues out there like trade and climate change or food security energy policy things of this sort that that need to be included in future negotiations and that needs to be done rather soon what what are your views on that ala think that as a matter of fact we will always have new challenges coming onto the system is that the WTO is not like a Bible or like a constitution that is not to be changed every other year so but I think that you have to adapt for example i think the climate changes of the discussion is a very challenging one and a very complicated one I think how do you marry the idea of free trade and the idea of a restrictions to emissions can be very tricky you see so I think the WTO must be open to those kind of discussions you know what do you think that the international crisis that we are all facing today has changed people's attitude towards trade I think it has in the short term because obviously if you have less income if you have less jobs and if you have less factories you are bound to to be less prone to to to competition to exposure to foreign competition that's inevitable that is going to pass a sunnah and I think basically what will remain is the fact that the WTO function as a wall of contention avoiding the worst of flooding in the protectionists flooding that would have been devastating and that would have been much more difficult to reverse in the future so I'm preah many thanks to you for appearing with us thank you

Running for president on a universal basic income platform

next up a conversation on universal basic income please welcome to the stage Andrew yang 2020 presidential candidate and founder of venture for America back to lead the conversation is the Atlantic's Derek Thompson again Andrew you're running for president yes yes I am you're running for president based on this issue of ubi universal basic income before we talk about the positives and negatives of this proposal and what it might do to America let's just define it to make sure that we're all on the same page what is a universal basic income what is your plan sure I just want to give a little bit of a run up to how I arrived at this point I spent the last seven years helping create 3,000 jobs in Michigan Ohio Alabama Louisiana and I'm convinced now that we're pouring water into a bathtub as a giant hole ripped in the bottom so universal basic income is a policy where every member of a society let's say every American adult receives a certain amount of money to meet his or her basic needs every month and my plan the freedom dividend is that every American adult would receive $1,000 per month free and clear $1,000 per month every American over the age of 18 18 this to a lot of people is gonna sound like a completely nutso idea so just to be clear has the u.s. ever has any government body in the u.s. existing or passed ever done anything like this well a law essentially identical to this passed the House of Representatives in 1971 under Richard Nixon Martin Luther King was for it Milton Friedman was for it and a thousand economists signed a letter saying this would be great for the economy and society and then a number of years later Alaska passed something identical to this in the form of the petroleum dividend where everyone in Alaska today was he was between one and two thousand dollars a year no questions asked from the petroleum fund and if you think about this for a moment Alaska is a deep red conservative state and the Republican governor made this case the Alaskan people he said who would you rather get the oil money the government who's just gonna screw it up or you the Alaskan people and the Alaskan said us and then now the petroleum did is wildly popular it has increased children's it's improved children's health and nutrition it has created thousands of jobs and no one can touch it and that's been an effect for 36 years so if you think about it what is the oil of the 21st century the oil of the 21st century is data AI autonomous vehicles and advanced technologies and that's how we're gonna pay for a freedom dividend for all Americans so a radical solution like this seems to at least imply a radical problem you have this book called the war on normal people what is the problem that this country and other developed and developing economies are going to face in the near future that you think necessitates a policy like ubi so I want everyone here to reflect why is Donald Trump our president today and the reason why Donald Trump is our president today is this we automated away four million manufacturing jobs in Michigan Ohio Pennsylvania Wisconsin Missouri Iowa all of the swing states that he needed to win and now we're about to do the same thing to millions of retail jobs call center jobs truck driving jobs fast-food jobs which are unfortunately the four most common jobs in the economy I have many friends in Silicon Valley who are working on this who know full well that this trend is about to accelerate so if we don't wake up and start implementing meaningful solutions to the fact that we are going through the greatest economic and technological transition in the history of the world then we are doomed to much much worse than Donald Trump a criticism of this piece a criticism of this argument says all right maybe we're entering the most radical transformation of the US economy in the history of the country but also maybe we're not like look at the unemployment rate it's under 4% in a period of technological unemployment with robots taking all of our jobs one thing you should absolutely see is rising productivity and said we see flatlining productivity another thing that you should see theoretically is that wage growth should be completely stagnant particularly at the bottom and in fact the Bureau of Labor Statistics just said today that wage growth is accelerating not only for a lot of for the entire country but in the last few years going back to the end of the Obama administration wage growth was rising the fastest at the bottom so what's going on if if the robots are really coming why can't we see it in the numbers yet so if you look at the headline unemployment rate it measures the people in the workforce we're looking for work what it does not measure is the fact that right now our labor force participation rate is sixty two point nine percent a multi-decade low and the same levels as El Salvador and the Dominican Republic and that is right now in year 10 of an expansion you can look that stat up almost one in five prime working age men in America between the ages of twenty one thirty it has not worked in the last 12 months so there is a massive displacement particularly of unskilled men that the Rosi unemployment stat which is essentially government misinformation and malpractice at this point does not bring to light and the productivity stats mean they're not going to show anything they're going to show a big zero for self-driving cars and trucks until the self-driving cars and trucks hit the road and my friends in Silicon Valley believe we are five to ten years away from automating away truck drivers trucking is the most common job in 29 states now think about this there are three and a half million truck drivers in the United States average age 49 ninety-four percent male average education high school they make about forty six thousand dollars a year on the other side you have my friends in Silicon Valley who are gunning for the hundred sixty eight billion dollars per year in labor savings fuel efficiency equipment utilization fewer accidents and they think that they are five to ten years away so what's going to happen when those three and a half million truckers start losing their jobs and as you suggest Eric the stats will show none of this until it happens but we're not ostriches you know we don't have to have our heads in the sand and just be like oh it's never gonna happen I mean we can all see it happening if we just wake up and open our eyes my sense is that every room like this is always relatively divided between some people who say I believe it technological unemployment is coming the robots will take our jobs even if you can't see in the numbers and some people who say I don't think this future is coming at all but I want to be clear and to be fair to universal basic income because this is a solution that's not like a knee replacement for failing knees something that only makes sense given the eventual occurrence of technological unemployment like aspirin it's like yes it can help with the headache but it might also be good for heart problems and it might also be good for general bodily health so even if this future of the robots taking our jobs doesn't come to pass what are the other benefits of ubi that you see yes so if you look at what's happening in America today a mindset of scarcity has swept most of the country where 57% of Americans today cannot afford an unexpected $500 bill so they're lurching week to week month to month and asking them to be positive about the future is unrealistic now if you put $1,000 a month in the hands of American families but you see very clearly in the data is you see an improvement in child nutrition and health you see an improvement in graduation rates you see an improvement in mental health you see lower levels of domestic violence you see lower hospital visits so these are things that you would expect a hundred percent very very clearly just by putting a thousand dollars into the hands of American families I also want to say on a more fundamental level right now our economic stats for example they dismiss the work of moms and my wife is at home with our two young boys right now one of whom is autistic and GDP will measure her contribution and zero one would really her contribution is what we need more of and more of in an age where we're going to be automating away more and more work so we need to broaden our conceptions of both work and value to become much much bigger and broader and this is necessary in my mind in part to achieve some measure of racial and gender inequality because the marketplace will systematically disregard and undervalue the work of women will also systematically exclude under represented minorities for meaningful opportunities I think I'm really glad you said that the last person who was on the stage with me Phil Thompson the deputy mayor of New York City was talking about the growing need for personal care aides and home health aides the two fastest growing jobs according to the Bureau of Labor Statistics over the next decade these are jobs whose average salary is below $30,000 but taking care of the old and the sick and those who can't take care of themselves even if market values that is an extremely unvalued service it's clearly immensely valuable to families yes and and that's something that I can't tell you how frustrating I find out when people is like oh we're gonna need more of this it's like yes we are gonna need more of that but right now that job pays twenty five thousand dollars a year with a turnover rate of 100 percent so if that's the job of the future like is that really the plan so what we need to do is we need to to create our own estimation of how these things ought to be valued because the market is gonna punish many of these things the market does not recognize caregiving arts and creativity journalism the environment infrastructure and public goods and so we need to broaden our conception of GDP GDP is something we invented almost a hundred years ago during the Great Depression and even the inventor said this is a terrible measurement of national well-being and we should never use it as that and we should include Parenthood and motherhood in the calculation so we need to evolve to the next stage of capitalism right now in 2018 and 2020 and redefine our economic measurements to include things like childhood success mental health and freedom from substance abuse levels of engagement with work I mean what percentage of Americans you think like their jobs right now it's at you I'm sure you all like your jobs but but most Americans do not environmental quality if we create a more holistic measurement for the economy we would also create touch points for many more Americans particularly those who are about to be displaced from the workforce or have already been displaced to be able to participate in meaningfully alright I have three big critiques that I need to go through with you those are basically cost inflation and laziness let's go through them in that order cost you're proposing a thousand dollars for every single person in this room every single month every single you know 280 million Americans every single month $12,000 for 280 million pete's only adults so it only makes it a bit it's only adults well yeah but the population is like 320 million so I was trying to do a math on that 250 million people let's say how much is this going to cost and can we afford it yes so the headline cost it's about two point four trillion dollars per year for content one more time two point four trillion a year be the headline cost and the US government currently spends just under four trillion dollars here the federal budget is four trillion the economy's up to 19 trillion up four trillion in the last ten years so two point four trillion seems like a lot but if you break it down it actually becomes affordable very quickly now the big change we need to make is we need to be in position to harness the gains from artificial intelligence and new technologies the big winners from those technologies are going to be Amazon Google Apple uber like the mega tech companies with trillion dollar valuations and the trap Orion right now is that they do not pay a lot of tax Amazon's trick is we didn't make any money this quarter no taxes alphabets trick is it all went through Ireland nothing to see here and so as these companies soak up more and more value the public's going to be seeing less and less even as the opportunities disappear so what we need to do is we need to join every other industrialized country in the world and have a value-added tax which would give the public as a slice of every Google search in every Amazon transaction which is the equivalent from the consumer standpoint of a consumption tax that's how a lot of people will experience it right now but it applies to businesses at every level of production so it's like oxygen and every other advanced country has already done this because our economy is so vast a value-added tax that even half the European level would generate almost a trillion dollars in revenue for the US that plus the 800 billion we currently spend on welfare spending plus the fact that by putting a thousand dollars into the hands of American adults you'd grow the economy by 12% and we'd get back five hundred billion a new tax revenue plus the hundreds of billions we would save in health care incarceration homelessness services and the massive value gains from having a population with higher education rates better health better nutrition better mental health better productivity all of those things together would make the freedom dividend pay for itself and then some conservatively we have to start investing in our people good companies invest in their people but then in the public space we say oh we have to try to like treat everyone like costs and avoid spending money and that's the opposite of what we need we need to reverse the mindset of scarcity with a mindset of abundance and the best way to do that is to secure Americans futures okay so when some economists here mindset of abundance they think a lot more money flowing around the same economic system we're giving a bunch of people who are only making say twenty thousand dollars a year an extra $12,000 a year why isn't inflation gonna go completely crazy on a bunch of consumer staples especially those that are over consumed by the poorest Americans well if you look at the causes of inflation right now in the US they tend to fall into three buckets housing education and healthcare if you look at consumer goods they're actually not surging in price a lot of them are even getting cheaper so that's clothing electronics media like the things that people consume and so putting money into people's hands there's no reason to think that it would cause a surge in the prices of these consumer goods where the market is quite efficient because they're still going to be a lot of price sensitivity it's not like these people all of a sudden I'm like oh I can pay ten bucks for a burger it's like price sensitivity will still be there and then they'll still be competition between firms in every particular industry and vertical so really the cause of inflation right now in the US are around these protected dysfunctional markets of health care education and housing alright last question before we turn to questions very quickly why won't this make us all lazy why won't free money just turn us into a nation of layabouts yes so $1,000 a month is still below the poverty line in this country the poverty line is twelve thousand seven hundred seventy dollars there is no reason to think that everyone's gonna be like oh I got a thousand dollars a month I can live large and stay at home even if you were a server making twenty four thousand dollars a year are you really gonna take a 50% pay cut and stay home but if you keep working you're up to $36,000 maybe you can actually put a little bit of money away start getting ahead take your kid out for a movie the data and I'm a very data-driven guy the opposite of Donald Trump is an Asian man who likes numbers and the data says that only two groups work fewer hours with more money new mothers who spend more time with our kids which I think we can all get behind and teenagers who graduate from high school at higher levels Andrew thank you we've got time for a couple of questions let's see how about right over here in the back this kind of reminds me of Lyndon B John we're gonna make America great again type of concept how different will that be we're after lyndon b johnson a lot of individuals did fall into that that laziness that idea of the government will support or help support how different is this this idea well one thing I love about universal basic income is that it's it aligns the incentives the individual with society's we're right now for example a disability program in the u.s. if you show yourself to be healthy then your benefits disappear and so everyone stays on well truly I mean the the churn rate from long-term disability is literally zero percent in this country whereas universal basic income if you start to make any money or get ahead you have to keep every dollar and you still keep the dollar that we gave you so the problem with a lot of the existing welfare programs is that that they're designed to take to give you less if you start to succeed and that's the opposite of what we need I'd also say really quickly the labor force participation rate actually grew rather tremendously after the 1960s especially as more women entered the labor force will go with right here in the front and row really interesting how do you sell this to the American people who have words like socialism or handout you know as you mentioned laziness how do you sell it it's great idea well I've been running for president now for a number of months I've been to Iowa five times and when I go to Iowa I say to them hey guys have you noticed doors closing in your Main streets they say yes and I say why is that they say Amazon it's like yeah is that gonna get better or worse worse what are you gonna do about it what can we do about it I'll tell you what you can do about it you can build a new economy from your people up from your families up from your communities up the trickle up economy and do that all we need to do is is vote in a freedom dividend and the Democrats of Iowa are super excited about that possibility I was talking to Derek backstage and he said you're only talking to Democrats and that's true so the Democrats I have to say are very very excited about this possibility and so we need to convey the Democrats of Iowa New Hampshire in the rest of the country first and then we can bring it to the rest of the country but I have no doubts that we're going to be able to make this incredibly popular very quickly because I'm already getting Trump supporters coming my way because if you think about conservatives and libertarians what they hate is government making decisions in bureaucracy what they like is self-determination and agency and so a dividend that puts money into their hands is actually very very appealing to a wide swath of Americans on both sides of the aisle and you thank you and thank you all thank you all [Applause]