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The Truth about the Flat World, Part Two

THINK TANK WITH BEN WATTENBERG
#1318 FRIEDMAN, Pt. 2
FEED DATE: June 30, 2005
Thomas Friedman

Opening Billboard: Funding for Think Tank is provided by...
(Pfizer) At Pfizer, we’re spending over five billion dollars looking
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Additional funding is provided by the Bernard and Irene Schwartz
Foundation, the Smith Richardson Foundation, and the Lynde and Harry
Bradley Foundation.

MR. WATTENBERG: Hello, I’m Ben Wattenberg. It looks like
globalization is here to stay. Rapid advances in telecommunications and
falling trade barriers have linked national economies and may even be
helping to shift authoritarian regimes toward openness.

But globalization has exposed Americans to competition from former
sleeping giants like China and India, and perhaps brought terrorism to
our front steps.

What is the future of globalization? Can it be a force for peace? Does
America have what it takes to compete?

To find out, Think Tank is joined this week by Thomas Friedman,
Pulitzer Prize-winning New York Times foreign affairs columnist
and author of The World is Flat: A Brief History of the 21st Century.

The Topic Before the House: the truth about the flat world, part two,
this Week on Think Tank.

MR. WATTENBERG: Tom Friedman, welcome back to Think Tank and a
discussion about your book, The World is Flat.

MR. FRIEDMAN: Great to be here, Ben.

MR. WATTENBERG: What should we do - in your judgment; I suspect we
may differ a little bit – to keep America prosperous and ambitious?

MR. FRIEDMAN: Well, number one, I happen to believe in investment
in things like science, in the defense research areas, in bioscience.
You know, it was government investment, you know, that brought us
things like the Internet. Let’s not forget that.

MR. WATTENBERG: You have a quotation in the book from Daniel
Greenberg, who’s a former news editor of Science Magazine and author of
a book, and he says that 'inside-the-beltway science - that is,
lobbying - has always been insatiable. If you double the National
Institutes of Health budget in five years, as we have recently done,
they would still be screaming their heads off.' And I sense - and I
want to talk about it soon - but there’s a lot of that going on. All
these crises saying, 'Oh, my God, the world is falling. Give me some
money.'

MR. FRIEDMAN: If some of that money, you know, gets a little
wasted, you know, that’s okay with me. If we’re going to waste some
money I’d rather waste it at the National Science Foundation, okay,
than a lot of other places. So, number one.
Number two, I think we have to have fully portable pensions
and healthcare in this country so that people feel flexible and free to
move from job to job and opportunity to opportunity in a flat world.
Thirdly, I happen to believe that we need wage insurance.
Some way to cushion people who get caught up in this flattening process
and do see their jobs outsourced very quickly, that encourages them to
move into and take a new job.
Fourthly, I think we need to find a way to make tertiary
education - that is post-secondary education; we’re talking about
everything from technical college to community college to university -
available to every young American because that is the only way
basically to ensure we will have a pool of people who will thrive in a
flat world.
Just two last things. We need politicians who are going
to describe the world to us as it really is, okay. If somebody’s going
to call a midnight meeting in Congress for my money, it shouldn’t be
about, you know, connecting or disconnecting the life support of a
single citizen. Maybe it should be about life support for the whole
country.
And lastly we need a different form of parenting. We’re
melding with two cultures, India and China, that have a very high ethic
of education.

MR. WATTENBERG: Tough love.

MR. FRIEDMAN: Tough love.

MR. WATTENBERG: That’s what you call it.

MR. FRIEDMAN: Mom, dad, throw away the game boy. Shut off the
stupid idiot-box TV and get Johnny and Suzy down to work.

MR. WATTENBERG: Okay. Let’s look at some of these things. First of
all, a lot of these things cost government money.

MR. FRIEDMAN: Yes.

MR. WATTENBERG: And the obvious first question is, okay, it’s going
to cost money. Are you for higher taxes or bigger deficits?

MR. FRIEDMAN: I’m for higher taxes.

MR. WATTENBERG: You’re for higher taxes.

MR. FRIEDMAN: Yes.

MR. WATTENBERG: Okay. So we got that. Now... No – no. That’s an
important...

MR. FRIEDMAN: And also the proposals I make, actually very few of
them - the only one that really costs money – five to seven billion
dollars a year – is wage insurance, which is peanuts compared to some
of the other, you know, programs that we have.

MR. WATTENBERG: Well, we have the earned income tax credit, which is
in a form wage insurance provided you still have a job. Now, you want
a portable pension scheme.

MR. FRIEDMAN: Right.

MR. WATTENBERG: President Bush, who you lay some pretty heavy strokes
on, which I want to talk to you about, he is promoting a portable
pension scheme which he calls personal accounts or partial
privatization of Social Security. Are you in favor of that?

MR. FRIEDMAN: I’m in favor of it only as part of a comprehensive
solution to Social Security, okay. I’m in favor, first of all, of
adjusting Social Security, the math, who can retire when at how much,
okay, to make sure the Social Security safety net is fully solvent.
I am uncomfortable, okay, with his proposal, as I understand it right
now, if it means borrowing a trillion more dollars. Because I think
through 401ks and other programs we can really accomplish the same
thing of getting more people to be owners of capital.

MR. WATTENBERG: Let me just switch gears for one moment then we can
come – I want to come back to some of this.

MR. FRIEDMAN: Sure.

MR. WATTENBERG: Did the explosion of high tech, did it also encourage
global terrorism? That’s something that you deal with in the book.

MR. FRIEDMAN: Yes. Well, the flattening of the world, Ben, is a
friend of Infosys, the leading Indian high tech company, and of Al
Qaeda. What we’re fighting in Iraq today, I believe, is nothing more
than a global, open source suicide supply chain. It operates just like
the supply chains of Dell and Wal-Mart and Costco and all these other
companies. You know, Bin Laden deploys a suicide bomber in Baghdad,
another is immediately recruited and transported down the supply chain
from Riyadh or the United Arab Emirates...

MR. WATTENBERG: All over the Internet.

MR. FRIEDMAN: All...

MR. WATTENBERG: With email and whatever.

MR. FRIEDMAN: Always remember, Ben, terrorists are early adopters
of new technology.

MR. WATTENBERG: They’re smart people.

MR. FRIEDMAN: They’re smart people.

MR. WATTENBERG: They’re not lower...

MR. FRIEDMAN: These are educated people. They are early adopters
and this is nothing more than an open source - Al Qaeda is nothing more
than an open source global supply chain.

MR. WATTENBERG: So in that sense, this high tech – it not only opens
great opportunities, but opens...

MR. FRIEDMAN: Great danger.

MR. WATTENBERG: Great danger.

MR. FRIEDMAN: Absolutely. Look and think about, I mean, Zarqawi,
now, this guy in Iraq who’s done so much damage there. He can now put
up an email message that goes right into your computer. You click on
AOL. You know, in the old days what did terrorists have to count on?
They had to count on me, the press...

MR. WATTENBERG: Right.

MR. FRIEDMAN: ... to come. They set off an explosion. They had to
count on us, the press, to come and film it. 'Wow, look at all that
carnage. Ladies and gentlemen, I’m standing in front of this carnage.
It’s terrible.' They don’t – they got rid of the middleman. I’m the
middleman. Okay. They outsourced me. Alright. They outsourced me to
the past.

MR. WATTENBERG: And of course all the satellite dishes are giving it
in your living room on television.

MR. FRIEDMAN: They outsourced me. Now they go right into my
computer. So now I click on AOL and they’re right there. They’re on
my homepage.

MR. WATTENBERG: It’s like anything else.

MR. FRIEDMAN: That’s right. Cuts both ways.

MR. WATTENBERG: When you get new technology you can use it for good
means and you can use it for bad means.

MR. FRIEDMAN: That’s what I say in the book, I’m a technological
determinist in the sense that I think people, if they have access to
the technology, they’ll use it. But what they’ll use it for is a whole
’nother question.

MR. WATTENBERG: Who’s going to win?

MR. FRIEDMAN: Bet on the good guys.

MR. WATTENBERG: You bet on the good guys.

MR. FRIEDMAN: Yes.

MR. WATTENBERG: That’s us?

MR. FRIEDMAN: That’s us. No question about it.

MR. WATTENBERG: Okay. You are very tough on President Bush and I
want to ask two questions about it. First of all, I mean, of the early
part of the century at least, the dominant image, I think, is going to
be that purple finger in Iraq, you know. And he didn’t start out that
way, I grant you, but has become the democracy champion around the
world. And you have seen subsequent developments, or prior - first in
Afghanistan; things going on in Lebanon; things maybe going on in the
grand prize in Egypt. I mean, you know this better than I - and a
number of other places around the world. So, does he get – and you
favored the war in Iraq?

MR. FRIEDMAN: Yes.

MR. WATTENBERG: Do you think he has been doing a good job on the
purple finger?

MR. FRIEDMAN: I have supported him. Not only supported, I’ve made
clear I think he deserves credit for what we’ve accomplished there.
But what we’ve accomplished there, Ben, is the necessary part but not
the sufficient part. And I say this not as someone who’s trying to
take something back from him; I say it as a statement of fact. We sit
here on a day when we’ve had two straight weeks of multiple suicide
bombs in Iraq, okay. And that purple finger or no purple finger, it
could end up the bloody finger and not the purple finger as the image
of Iraq.

MR. WATTENBERG: We don’t know what’s going to happen yet.

MR. FRIEDMAN: What is the sufficient thing for Iraq to work is that
democracy there be self-sustaining. That it not require a 140,000
troops and another hundred billion American dollars. I really – I hope
for that. I believe the investment we’ve made so far is an investment
that is in our fundamental national interest, but we are not there yet.
It is way too early to be writing the history of this, or for anyone –
myself, yourself or the president - to take a victory lap.

MR. WATTENBERG: Okay. You also say that after 9/11 President Bush
split the country, he was divisive. And you said he didn’t even have a
mandate in the year 2000 - which we could argue; I don’t want to get
into the electoral. I mean he won the election; he was the President.
You’ve said you need politicians who lead. He ran and then he did –
won a real majority in 2004. He’s not like you. I mean, he’s a
conservative and he has different views on the environment and he has
different views on social issues. What is wrong? Why is that
divisive? I mean you’re saying politicians ought to say what they
mean. That is the way he ran. Why is that divisive? I mean, I know
people who say, 'I don’t agree with Bush but at least he sticks up for
what he believes.'

MR. FRIEDMAN: Right. Because I don’t think actually – is how he
ran. I think he ran as a compassionate conservative.

MR. WATTENBERG: Right.

MR. FRIEDMAN: And I believe he ruled, okay, as a radical
conservative in many, many ways.

MR. WATTENBERG: What – tell me some ways that he...

MR. FRIEDMAN: Particularly on the tax issue. I believe that he
used, okay, the energy of 9/11 basically to take a hard right
republican agenda from 9/10 and drive it into a 9/12 world. And I
believe, okay, that we could have done so much with that energy from
9/11. We could have had an energy tax, okay, of a dollar a barrel,
dollar a gallon, which I called for - I called it a patriot tax, I
called for it two weeks after 911. Had we had an energy tax, had we
had a president who said, 'we are not going to just engage in a – I’m
not just going to tell you to go shopping. I’m going to tell you,
friends, we’re at war. And we are not going to fight a war where we’re
funding both sides in the war on terrorism. We’re not going to fund
the army, navy, and marine corp with our tax dollars and then the Saudi
mullahs and madrassas with our oil purchases. So we’re going to have a
dollar a gallon gasoline tax.' Now had he done that, today, Ben, our
gasoline would still be two dollars a gallon just like it is now, only
we would have captured the extra dollar; not OPEC, not Saudi charities,
and not jihadist movements.

MR. WATTENBERG: Let me ask you – let’s sort of pick that apart a
little bit. I’m going to classify you - you tell me if I’m wrong - as
a moderate liberal. That sound about right?

MR. FRIEDMAN: Well, on domestic policy. On foreign policy I’m a
liberal hawk.

MR. WATTENBERG: You’re a liberal hawk. Good.

MR. FRIEDMAN: And on a domestic policy I’m a moderate liberal.

MR. WATTENBERG: Okay. Let’s talk about some of this energy stuff,
which is I guess mostly domestic. You find liberals, as a rule,
against nuclear power.

MR. FRIEDMAN: Not me, though.

MR. WATTENBERG: Not you. You’re...

MR. FRIEDMAN: I’m in favor of nuclear power.

MR. WATTENBERG: You’re in favor of nuclear power. Are you in favor
of drilling in the Arctic National Wildlife Reserve?

MR. FRIEDMAN: Only if it is part of a comprehensive energy plan
that includes conservation, alternative energy, nuclear, and a gasoline
tax. Not as the sole alternative. No, I’m not. Only if it’s part of
a comprehensive plan.

MR. WATTENBERG: But doesn’t a dollar a gallon gasoline tax – I mean,
Steven Spielberg and you and me are going to drive what we want to –
even me – are going to drive what we want to, but somebody in the lower
end of the middle class, at least, that extra dollar a gallon on
gasoline, I mean, that’s a regressive tax.

MR. FRIEDMAN: Sure is.

MR. WATTENBERG: So...

MR. FRIEDMAN: And we’ve just had it, only it went to the Saudi
treasury. Gasoline was about $1.25 on 9/11. Today it’s about $2.50.
Had we taken the lead and imposed a gasoline tax, believe me, gas would
still be just about $2.00, $2.50 a gallon at the pump.

MR. WATTENBERG: Well, there’d still be the same amount of gasoline
and still have the Chinese and the Indians wanting to buy up all the
gasoline or oil. It would be $3.50 a barrel – a gallon.

MR. FRIEDMAN: I believe our consumption would have been affected.
We would have set an example. You would have encouraged hybrid
innovation...

MR. WATTENBERG: I see.

MR. FRIEDMAN: ... I mean, we’re talking about three years ago. Had
we made that move then, we would have stimulated an enormous amount of
conservation by then.
But let’s take your point. Let’s say that gas would today
be about $3.00 a gallon.

MR. WATTENBERG: Okay.

MR. FRIEDMAN: Well, that’s half of what it is in Europe, number
one. And they seem to be doing okay. If you look what’s happening to
the Euro vis-à-vis the dollar, never mind. It’s half of what it is in
Europe. But more importantly, we would have captured that money for
our deficit, for our schools, for our roads, okay, for our innovation,
and instead we – the drivers – the guy in Wyoming’s still paying the
tax; he’s just paying it to the Saudi treasury via Exxon. Well how
smart is that?

MR. WATTENBERG: Would it be such a terrible thing if we become the
second most wealthy country in the world, or the third most wealthy, or
the tenth most, instead of the first? I mean, Kuwait was number one
for a while and they were not a – they were not a great country. I
mean, they were the richest country per capita. Suppose we said that
our biggest goal in the world today is not to be the richest country
but to – but to spread democratic views and values and promote them and
encourage them around the world. That that’s more important to us – it
might not be to the voter, but we’re talking, I don’t know, least
level. I think you sort of believe that, don’t you?

MR. FRIEDMAN: No.

MR. WATTENBERG: No.

MR. FRIEDMAN: I think that...

MR. WATTENBERG: Okay.

MR. FRIEDMAN: I think that good ideas don’t just spread. I think
ideas are spread by power. You know, when the Soviet Union was
powerful, its bad ideas got a huge global airing and I do believe that
a more powerful – economically powerful - America, which will mean
militarily powerful America, will be better positioned, be better
respected, better listened to, to promote the ideas of freedom and
democracy. So I don’t want to be second. I don’t want to be third. I
think I...

MR. WATTENBERG: In – in...

MR. FRIEDMAN: I think power matters...

MR. WATTENBERG: In income per capita. You have a problem that...

MR. FRIEDMAN: Income per capita doesn’t mean anything because, see,
Saudi Arabia or Kuwait, they sit on an oil well. I want to be - in
terms of actually producing wealth - I want to be number one.

MR. WATTENBERG: And you think that’s more important to the history of
the world and to America than encouraging and promoting democracy?

MR. FRIEDMAN: I think they’re related.

MR. WATTENBERG: It’s – they’re related.

MR. FRIEDMAN: I think they’re – fundamentally. I think we are the
world. I think nothing good happens out there. I think few good
things happen in the world without America being involved. I think a
lot of bad things happen with America not being involved.

MR. WATTENBERG: You’ve said in the book that, 'economic stability
will be a thing of the past and that the weak will fall further behind
while the entrepreneurial class will thrive.' Now that sounds very
Darwinian. Is that what’s behind the protest movement on the World
Trade Organization and – or is that just the same old gang?

MR. FRIEDMAN: I think the protest movement on - the anti-
globalization movement, as it came to be known - I think is a – has
always been a conglomeration of forces. It’s been, I think,
protectionist trade unions. It’s been college students feeling guilty
over American wealth in the age of globalization. It’s been some very
sincere and I think important NGOs worried about how we globalize in
terms of labor standards, in terms of environment. It’s been
Trotskyites in the old left trying to resurrect collectivist
ideologies. So I think the anti-globalization movement is really a –
been a broad kind of catchall coalition for a lot of different groups.

MR. WATTENBERG: I want to go back to something that I kept thinking
about. My late colleague at the AEI, Former Chairman of the Council of
Economic Advisors, Herb Stein. You must have known...

MR. FRIEDMAN: Sure.

MR. WATTENBERG: Used to say that no – and he was a big techie in the
early days. He had – was in all these chat rooms and everything. But
he said there will never be a time in the world -- and he had a set of
dates, I think it was from like 1895 to 1915, something like that,
where he listed the new developments that came into being and they
included the automobile, the airplane, radio, electric lights, indoor
plumbing, the telephone, the elevator, home electricity, and I think
the one that sort of – it was just coming in as an industrial thing
then but that may really be the savior of the tropical countries – air
conditioning. When you look at that list, would you buy the notion
that what’s going on now - while very innovative and very interesting,
and if you got some specific stories of what we’re doing I’d love to
hear them - but that in terms of a burst of new innovation, maybe it’s
in second place.

MR. FRIEDMAN: I’m not so sure. First of all, we’re just at the
beginning of this era.

MR. WATTENBERG: Right.

MR. FRIEDMAN: And I’ve never really thought about the aggregate
number of new technologies and their impact. But I’ll tell you
something, Ben. You put a $12, $25 Motorola telephone with a kid in
India and a wireless connection that connects him up to Google, that
makes him in contact with all the world’s knowledge. Well, that may
not be up there with air conditioning or ahead of it, but I’ll tell
you; I think it’s going to be profound.

MR. WATTENBERG: What are some of the things that we might be looking
forward to?

MR. FRIEDMAN: Well, I think what we’re looking forward to is an
incredible era of innovation because what we’re doing when the world
gets flat like this is we’re connecting all the knowledge pools in the
world together. That’s what’s happening. That’s really exciting. The
next great breakthrough in bioscience - as Marc Andreessen says in the
book, the man who invented the internet browser – could well come from
a fifteen-year-old in Romania who downloads the human genome on his $25
Motorola cell phone connected to Google.

MR. WATTENBERG: You make the point, and I just want to emphasize – I
mean, let you elaborate on it. This is good for everybody.

MR. FRIEDMAN: I think it is.

MR. WATTENBERG: I mean, if you have more innovation. I mean...

MR. FRIEDMAN: More innovation means more new kinds of jobs, more
stuff to do, more creative ways to grow the economy, and it should be
good for everyone as long as you have the knowledge skills to grab a
slice of that new pie.

MR. WATTENBERG: Let’s talk for a minute again about immigration. You
know, the book I gave you that I wrote shows that fertility rates in
the world are way down. I mean, you need 2.1 children per woman to
just keep the population stable. In Europe it’s down to 1.4; China’s
down at 1.6, or something like that. Can – in America, largely because
of our immigration, notwithstanding the things you’ve said, we are
programmed -- and China and India you look out toward the end of the
century, are programmed by the – projected by the United Nations to
come down in population, albeit from stupendously high levels. But the
United States is projected to go up from 300 million to 400 million to
500 million. But we are going to be, come what may, big-time players,
aren’t we? I mean...

MR. FRIEDMAN: Yes, if you look at purely from a demographic point
of view there’s no question that we still are a magnet for immigrants
and I think we’re still a magnet for a lot of those intellectual draft
choices that we want. But we’re not that magnet the way we were in the
past. What will happen thirty years out of fifty years out, you know,
when China basically hits this inflection point and starts to shrink,
India, I believe, will continue to grow. I can’t predict. All I know
is here’s who’s going to succeed in the flat world: the countries with
the best infrastructure, with the most educated population, with the
most stable political system, with the best rule of law.

MR. WATTENBERG: There’s a phrase that’s used in the academic
literature called 'American exceptionalism', where we really are
different and I accept it and I think you do also.

MR. FRIEDMAN: Yes.

MR. WATTENBERG: America the exceptional. This is our final question.
What is the single most important thing we should be doing that we’re
not doing?

MR. FRIEDMAN: I think we have to get much more serious about
education, Ben. I think we’ve been riding a little bit on our
reputation and when I look at those international tests and I see
what’s happening to American kids – fourth grade, eighth grade, by
twelfth grade of high school - that really matters. That’s going to
catch up with us over time. We’re kind of living in this mood that
even if we’re behind we’ll get to that problem when we get to it. Oh,
if we’re falling behind in broadband, in wireless, in education, no
problem; we’ll get to it when we get to it.
Well, when the world is flat, I think you know, that isn’t
the case anymore. And I think we have got to sit down, really look
ourselves in the eye. As I said many times, when I was growing up my
parents said to me, 'Tom, finish your dinner. People in China and
India are starving.' And I say to my girls, 'Girls, finish your
homework. People in China and India are starving for your jobs.' And
in a flat world, they can have them. So there’s one entitlement, Ben,
we have to get rid of and that is our sense of entitlement.

MR. WATTENBERG: Tom Friedman, thank you very much for joining us on
Think Tank. And thank you. Please, remember to send us your comments
via email. We think it makes our program better. For Think Tank, I’m
Ben Wattenberg.

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