I recently watched the Bill Gates interview with Charlie Rose, if you missed it check it out here http://video.google.com/videoplay?docid=-1570088833224980251 as its is worth watching.

My first observation was just how much of a statesman Bill Gates is turning into, historically I wasn’t always a Bill Gates fan, now I am. J His poise, humility and depth of understand were encouraging and I see exactly why Warren Buffet made the donation he did to their foundation. (Much Respect)

Anyway, aside from the education piece of this (which I will deal with separately), there are two key points this interview helps to drive home for me:

1. The Shift In Debate:

This is the first time I have left like I detected a shift in debate from “is globalization a going to happen and is it a good thing” to a focus on more on (a) it is taken for granted that it will happen; (b) what will its impact be on the USA and (c) how do we best prepare for it to benefit from it.

2. The USA from top to bottom needs to change its thinking on globalization: (Democrats and Republicans)

Here is an except from the interview that I particularly agreed with.

“Poverty is a measure. I remember readying a study about how aids was lowering the GNP of certain countries and I was thinking that is strange they have this backwards GNP is a tool we measure to get at human welfare and when people are suffering from aids they are not going around saying ‘oh man the GNP is going down here’, they are dying they are suffering … so poverty and economic analysis is very important but you have to map it back to what are those conditions…”

“The virtuous cycle is that as you improve agriculture, you get the resources to build roads, nutrition goes up, education and literacy goes up and you create this cycle where time is freed up to focus on non-agricultural things. China (almost the entire country) is going through this right now, Vietnam with a delay of about 18 years is happening right now. Using the brainpower of the people in those countries to think about the problems not just there but contributing to the global good, inventing medicine, writing software etc.”

“I am optimistic, there are a few things that set you back. When the government in a country is setting the wrong incentives or undermining the basic infrastructure the ability to overcome that there is a modest amount you can do. For example corruption in Nigeria. Zimbabwe was the best example of a country in Africa, but governance has now driven them 15 years backwards from where they should be.”

What do you worry about in a flat world?

“The United States has a lot of things that are good for it in this new global economy and some things that will definitely hold it back. We have to renew our strengths particularly our universities – despite the fact that the cost of doing business in the United States is the highest anywhere. It is the symbiosis between universities and small and large businesses. Other countries look at that for example Shingwa University looks at Standford and says we want to be like that.”

What have they done?

“China is the pace setter for a lot of things, not just efficient manufacturing, drawing on the talent of people they have. There is a sense of urgency and speed, its like capitalism running at a higher speed. Those minds are going to be inventing medicines and writing software and contributing to the global good. For the US there are two things, one we have to renew our commitment to the things that made us strong and the second is we have to get good at accepting that as the world gets richer, and it will, richer in the meaningful sense of curing cancer, more nutrition and education for all 6 billion people, that because of innovation is going faster than ever before, some people miss that, very few things go against that, new epidemics do terrorism could, but it’s a very positive picture, the US has to get used to that our relative share of everything – ability to unilateral make decisions, our military power, our economic power, innovation our portion of that will not be so out of line to our 5% of world population as it is today and that’s ok but when you think of that in terms of trade policy, getting along, or even general foreign policy the US has sort of been spoiled in terms of being a leader for so long and the idea that it is more of a multilateral environment. Especially, when one thinks of it in a war type analogy where this is only one winner and one loser. Their pride is in the relative position rather than the improvement of all economics situations.

As those brains are coming into the economy inventing new things the entire world benefits from it. Same as the world has from the USA, we have done a favor to them. Now they are going to be contributing too. You read reports that say if China could be made poor that would be good for us, the truth is the opposite, if we could say they are as rich as us today, if you believe in humanity that is a good thing but even for a person in the united states that is a good thing, it is an unstoppable thing, and if you try to unnaturally prevent that um you do the wrong things.

The trend of less and less students going into math and computer sciences has continued down and you can even go into high school and see that is going to continue going down. That is a scary thing. We will have a better future no matter what, but are we pursuing policies that mean our relative increase is as good as it should be and particularly as you take society as a whole. But we have to make our education system educate almost everyone because the only jobs left in the high cost economy require a much higher level of education than when these high schools were designed 20 years ago. One positive thing I have seen in the last few years in the some of the charter schools where you really redesign the curriculum, like high-tech high (San Diego) lots of the kids are interested in math and science because they do it in a more social project orientated way. Its not like crossing the desert where learn calculus and some day we will tell you why.”

Is there any loss for the United States because the gap is narrowing (China / India vs USA)

“If you care about our relative share of these things where its good when we do poorly yes its bad, these trends lines are all really bad. 1945 was our best year Europe was in bad shape our share was the highest at that point.

From 45-60 our improvement relative to others was low they improved more during that time period. It proves the fallacy of thinking in relative terms. It is an adjustment it is a very different world than a single super power where most of the innovation is coming from one place.”

Is there a downside to that?

“The fact they are doing better is good. If we want to get our share we need renew our excellence we need to look at what our edge has been. One edge has been smart people want to come here, we have had the crème of the crop that has been a huge benefit to us, we are making that tougher with our immigration policies. We are not pushing that advantage and it can be we are not benefiting.”

Conclusion:

This world we live in has always benefited (though admittedly with growing pains) from a division of labor. The fundamentals of ‘capitalism’ are no longer the debate here. Whether you take the Judeo-Christian perspective of “go forth and prosper” or the pagan view of virtues and justice the process of globalization and its associated freedom of capital and division of labor is creating a larger base of human knowledge from which we all stand to benefit. It is also (not withstanding the warnings in “The Axemakers Gift”) improving more to more.

However, with this said there are two very specific issues this also raises, (1) how will America deal with this transition from a sole super-power to shared power and (2) world education – how will we ensure that the young of the world are equip to live full and rich lives in a global economy?