How to pronounce "overenthusiastic"

I'm going to talk to you

about power in this 21st century.

And basically, what I'd like to tell you

is that power is changing,

and there are two types of changes

I want to discuss.

One is power transition,

which is change of power amongst states.

And there the simple version of the message

is it's moving from West to East.

The other is power diffusion,

the way power is moving

from all states West or East

to non-state actors.

Those two things

are the huge shifts of power

in our century.

And I want to tell you about them each separately

and then how they interact

and why, in the end, there may be some good news.

When we talk about power transition,

we often talk about the rise of Asia.

It really should be called

the recovery or return of Asia.

If we looked at the world

in 1800,

you'd find that more than half of the world's people

lived in Asia

and they made more than half the world's product.

Now fast forward to 1900:

half the world's people -- more than half -- still live in Asia,

but they're now making

only a fifth of the world's product.

What happened? The Industrial Revolution,

which meant that all of a sudden,

Europe and America

became the dominant center of the world.

What we're going to see in the 21st century

is Asia gradually returning

to being more than half of the world's population

and more than half of the world's product.

That's important and it's an important shift.

But let me tell you a little bit about

the other shift that I'm talking about,

which is power diffusion.

To understand power diffusion

put this in your mind:

computing and communications costs

have fallen a thousandfold

between 1970

and the beginning of this century.

Now that's a big abstract number.

But to make it more real,

if the price of an automobile

had fallen as rapidly

as the price of computing power,

you could buy a car today

for five dollars.

Now when the price of any technology

declines that dramatically,

the barriers to entry go down.

Anybody can play in the game.

So in 1970,

if you wanted to communicate

from Oxford to Johannesburg

to New Delhi

to Brasilia

and anywhere simultaneously,

you could do it.

The technology was there.

But to be able to do it,

you had to be very rich --

a government, a multinational corporation,

maybe the Catholic Church --

but you had to be pretty wealthy.

Now, anybody has that capacity,

which previously was restricted by price

just to a few actors.

If they have the price of entry into an Internet cafe --

the last time I looked, it was something like a pound an hour --

and if you have Skype, it's free.

So capabilities

that were once restricted

are now available to everyone.

And what that means

is not that the age of the State is over.

The State still matters.

But the stage is crowded.

The State's not alone. There are many, many actors.

Some of that's good:

Oxfam,

a great non-governmental actor.

Some of it's bad:

Al Qaeda, another non-governmental actor.

But think of what it does

to how we think in traditional terms and concepts.

We think in terms of war

and interstate war.

And you can think back to 1941

when the government of Japan

attacked the United States at Pearl Harbor.

It's worth noticing

that a non-state actor

attacking the United States in 2001

killed more Americans

than the government of Japan did in 1941.

You might think of that

as the privatization of war.

So we're seeing a great change

in terms of diffusion of power.

Now the problem is

that we're not thinking about it in very innovative ways.

So let me step back

and ask: what's power?

Power is simple the ability

to affect others

to get the outcomes you want,

and you can do it in three ways.

You can do it with threats

of coercion, "sticks,"

you can do it with payments,

"carrots,"

or you can do it by getting others

to want what you want.

And that ability to get others to want what you want,

to get the outcomes you want

without coercion or payment,

is what I call soft power.

And that soft power has been much neglected

and much misunderstood,

and yet it's tremendously important.

Indeed, if you can learn

to use more soft power,

you can save a lot

on carrots and sticks.

Traditionally, the way people thought about power

was primarily in terms of military power.

For example, the great Oxford historian

who taught here at this university, A.J.P. Taylor,

defined a great power

as a country able to prevail in war.

But we need a new narrative

if we're to understand power in the 21st century.

It's not just prevailing at war,

though war still persists.

It's not whose army wins;

it's also whose story wins.

And we have to think much more in terms of narratives

and whose narrative is going to be effective.

Now let me go back

to the question

of power transition

between states

and what's happening there.

the narratives that we use now

tend to be the rise and fall

of the great powers.

And the current narrative is all about

the rise of China

and the decline of the United States.

Indeed, with the 2008 financial crisis,

many people said this was

the beginning of the end of American power.

The tectonic plates

of world politics were shifting.

And president Medvedev of Russia, for example,

pronounced in 2008

this was the beginning of the end

of United States power.

But in fact,

this metaphor of decline

is often very misleading.

If you look at history, in recent history,

you'll see the cycles of belief

in American decline

come and go every 10 or 15 years or so.

In 1958,

after the Soviets put up Sputnik,

it was "That's the end of America."

In 1973, with the oil embargo

and the closing of the gold window,

that was the end of America.

In the 1980s,

as America went through a transition in the Reagan period,

between the rust belt economy of the midwest

to the Silicon Valley economy of California,

that was the end of America.

But in fact, what we've seen

is none of those were true.

Indeed, people were over-enthusiastic

in the early 2000s,

thinking America could do anything,

which led us into some disastrous

foreign policy adventures,

and now we're back to decline again.

The moral of this story

is all these narratives about rise and fall and decline

tell us a lot more about psychology

than they do about reality.

If we try to focus on the reality,

then what we need to focus on

is what's really happening

in terms of China and the United States.

Goldman Sachs has projected

that China, the Chinese economy,

will surpass that of the U.S.

by 2027.

So we've got, what,

17 more years to go or so

before China's bigger.

Now someday,

with a billion point three people getting richer,

they are going to be bigger than the United States.

But be very careful about these projections

such as the Goldman Sachs projection

as though that gives you an accurate picture

of power transition in this century.

Let me mention three reasons why it's too simple.

First of all, it's a linear projection.

You know, everything says,

here's the growth rate of China, here's the growth rate of the U.S.,

here it goes -- straight line.

History is not linear.

There are often bumps along the road, accidents along the way.

The second thing is

that the Chinese economy

passes the U.S. economy in, let's say, 2030,

which it may it,

that will be a measure of total economic size,

but not of per capita income --

won't tell you about the composition of the economy.

China still has large areas

of underdevelopment

and per capita income is a better measure

of the sophistication of the economy.

And that the Chinese won't catch up or pass the Americans

until somewhere in the latter part,

after 2050, of this century.

The other point that's worth noticing

is how one-dimensional

this projection is.

You know, it looks at economic power

measured by GDP.

Doesn't tell you much about military power,

doesn't tell you very much about soft power.

It's all very one-dimensional.

And also, when we think about the rise of Asia,

or return of Asia

as I called it a little bit earlier,

it's worth remembering Asia's not one thing.

If you're sitting in Japan,

or in New Delhi,

or in Hanoi,

your view of the rise of China

is a little different than if you're sitting in Beijing.

Indeed, one of the advantages

that the Americans will have

in terms of power in Asia

is all those countries

want an American insurance policy

against the rise of China.

It's as though Mexico and Canada

were hostile neighbors to the United States,

which they're not.

So these simple projections

of the Goldman Sachs type

are not telling us what we need to know

about power transition.

But you might ask, well so what in any case?

Why does it matter? Who cares?

Is this just a game

that diplomats and academics play?

The answer is it matters quite a lot.

Because, if you believe in decline

and you get the answers wrong on this,

the facts, not the myths,

you may have policies which are very dangerous.

Let me give you an example from history.

The Peloponnesian War

was the great conflict

in which the Greek city state system

tore itself apart

two and a half millennia ago.

What caused it?

Thucydides, the great historian of the the Peloponnesian War,

said it was the rise in the power of Athens

and the fear it created in Sparta.

Notice both halves of that explanation.

Many people argue

that the 21st century

is going to repeat the 20th century,

in which World War One,

the great conflagration

in which the European state system

tore itself apart

and destroyed its centrality in the world,

that that was caused by

the rise in the power of Germany

and the fear it created in Britain.

So there are people who are telling us

this is going to be reproduced today,

that what we're going to see

is the same thing now in this century.

No, I think that's wrong.

It's bad history.

For one thing, Germany had surpassed Britain

in industrial strength by 1900.

And as I said earlier,

China has not passed the United States.

But also, if you have this belief

and it creates a sense of fear,

it leads to overreaction.

And the greatest danger we have

of managing this power transition

of the shift toward the East is fear.

To paraphrase Franklin Roosevelt

from a different context,

the greatest thing we have to fear is fear itself.

We don't have to fear the rise of China

or the return of Asia.

And if we have policies

in which we take it

in that larger historical perspective,

we're going to be able

to manage this process.

Let me say a word now

about the distribution of power

and how it relates to power diffusion

and then pull these two types together.

If you ask how is power distributed in the world today,

it's distributed much like

a three-dimensional chess game.

Top board:

military power among states.

The United States is the only superpower,

and it's likely to remain that way

for two or three decades.

China's not going to replace the U.S. on this military board.

Middle board of this three-dimensional chess game:

economic power among states.

Power is multi-polar.

There are balancers --

the U.S., Europe,

China, Japan

can balance each other.

The bottom board of this three-dimensional,

the board of transnational relations,

things that cross borders outside the control of governments,

things like climate change, drug trade,

financial flows,

pandemics,

all these things that cross borders

outside the control of governments,

there nobody's in charge.

It makes no sense to call this unipolar

or multi-polar.

Power is chaotically distributed.

And the only way you can solve these problems --

and this is where many greatest challenges

are coming in this century --

is through cooperation,

through working together,

which means that soft power becomes more important,

that ability to organize networks

to deal with these kinds of problems

and to be able to get cooperation.

Another way of putting it

is that as we think of power in the 21st century,

we want to get away from the idea

that power's always zero sum --

my gain is your loss and vice versa.

Power can also be positive sum,

where your gain can be my gain.

If China develops greater energy security

and greater capacity

to deal with its problems of carbon emissions,

that's good for us

as well as good for China

as well as good for everybody else.

So empowering China

to deal with its own problems of carbon

is good for everybody,

and it's not a zero sum, I win, you lose.

It's one in which we can all gain.

So as we think about power

in this century,

we want to get away from this view

that it's all I win, you lose.

Now I don't mean to be Pollyannaish about this.

Wars persist. Power persists.

Military power is important.

Keeping balances is important.

All this still persists.

Hard power is there,

and it will remain.

But unless you learn how to mix

hard power with soft power

into strategies that I call smart power,

you're not going to deal with the new kinds of problems

that we're facing.

So the key question that we need to think about as we look at this

is how do we work together

to produce global public goods,

things from which all of us can benefit?

How do we define our national interests

so that it's not just zero sum,

but positive sum.

In that sense, if we define our interests,

for example, for the United States

the way Britain defined its interests in the 19th century,

keeping an open trading system,

keeping a monetary stability, keeping freedom of the seas --

those were good for Britain,

they were good for others as well.

And in the 21st century, you have to do an analog to that.

How do we produce global public goods,

which are good for us,

but good for everyone at the same time?

And that's going to be the good news dimension

of what we need to think about

as we think of power in the 21st century.

There are ways to define our interests

in which, while protecting ourselves with hard power,

we can organize with others in networks

to produce, not only public goods,

but ways that will enhance our soft power.

So if one looks at the statements

that have been made about this,

I am impressed that when Hillary Clinton

described the foreign policy

of the Obama administration,

she said that the foreign policy of the Obama administration

was going to be smart power,

as she put it, "using all the tools

in our foreign policy tool box."

And if we're going to deal

with these two great power shifts that I've described,

the power shift represented by transition among states,

the power shift represented

by diffusion of power away from all states,

we're going to have to develop a new narrative of power

in which we combine hard and soft power

into strategies of smart power.

And that's the good news I have. We can do that.

Thank you very much.

(Applause)