[Script Info]
Title: 
[Events]
Format: Layer, Start, End, Style, Name, MarginL, MarginR, MarginV, Effect, Text
Dialogue: 0,0:00:00.47,0:00:04.100,Default,,0000,0000,0000,,I'm here to talk to you about how globalized we are,
Dialogue: 0,0:00:04.100,0:00:07.51,Default,,0000,0000,0000,,how globalized we aren't,
Dialogue: 0,0:00:07.51,0:00:11.05,Default,,0000,0000,0000,,and why it's important to actually be accurate
Dialogue: 0,0:00:11.05,0:00:13.83,Default,,0000,0000,0000,,in making those kinds of assessments.
Dialogue: 0,0:00:13.83,0:00:17.57,Default,,0000,0000,0000,,And the leading point of view on this, whether measured
Dialogue: 0,0:00:17.57,0:00:21.76,Default,,0000,0000,0000,,by number of books sold, mentions in media,
Dialogue: 0,0:00:21.76,0:00:24.98,Default,,0000,0000,0000,,or surveys that I've run with groups ranging from
Dialogue: 0,0:00:24.98,0:00:29.06,Default,,0000,0000,0000,,my students to delegates to the World Trade Organization,
Dialogue: 0,0:00:29.06,0:00:32.17,Default,,0000,0000,0000,,is this view that national borders
Dialogue: 0,0:00:32.17,0:00:35.72,Default,,0000,0000,0000,,really don't matter very much anymore,
Dialogue: 0,0:00:35.72,0:00:39.78,Default,,0000,0000,0000,,cross-border integration is close to complete,
Dialogue: 0,0:00:39.78,0:00:42.07,Default,,0000,0000,0000,,and we live in one world.
Dialogue: 0,0:00:42.07,0:00:44.31,Default,,0000,0000,0000,,And what's interesting about this view
Dialogue: 0,0:00:44.31,0:00:47.90,Default,,0000,0000,0000,,is, again, it's a view that's held by pro-globalizers
Dialogue: 0,0:00:47.90,0:00:52.67,Default,,0000,0000,0000,,like Tom Friedman, from whose book this quote is obviously excerpted,
Dialogue: 0,0:00:52.67,0:00:56.60,Default,,0000,0000,0000,,but it's also held by anti-globalizers, who see this giant
Dialogue: 0,0:00:56.60,0:01:01.49,Default,,0000,0000,0000,,globalization tsunami that's about to wreck all our lives
Dialogue: 0,0:01:01.49,0:01:04.38,Default,,0000,0000,0000,,if it hasn't already done so.
Dialogue: 0,0:01:04.38,0:01:08.40,Default,,0000,0000,0000,,The other thing I would add is that this is not a new view.
Dialogue: 0,0:01:08.40,0:01:12.11,Default,,0000,0000,0000,,I'm a little bit of an amateur historian, so I've spent
Dialogue: 0,0:01:12.11,0:01:16.09,Default,,0000,0000,0000,,some time going back, trying to see the first mention
Dialogue: 0,0:01:16.09,0:01:19.81,Default,,0000,0000,0000,,of this kind of thing. And the best, earliest quote
Dialogue: 0,0:01:19.81,0:01:23.65,Default,,0000,0000,0000,,that I could find was one from David Livingstone,
Dialogue: 0,0:01:23.65,0:01:29.70,Default,,0000,0000,0000,,writing in the 1850s about how the railroad, the steam ship,
Dialogue: 0,0:01:29.70,0:01:34.17,Default,,0000,0000,0000,,and the telegraph were integrating East Africa perfectly
Dialogue: 0,0:01:34.17,0:01:37.54,Default,,0000,0000,0000,,with the rest of the world.
Dialogue: 0,0:01:37.54,0:01:39.72,Default,,0000,0000,0000,,Now clearly, David Livingstone
Dialogue: 0,0:01:39.72,0:01:42.74,Default,,0000,0000,0000,,was a little bit ahead of his time,
Dialogue: 0,0:01:42.74,0:01:46.28,Default,,0000,0000,0000,,but it does seem useful to ask ourselves,
Dialogue: 0,0:01:46.28,0:01:48.38,Default,,0000,0000,0000,,"Just how global are we?"
Dialogue: 0,0:01:48.38,0:01:51.08,Default,,0000,0000,0000,,before we think about where we go from here.
Dialogue: 0,0:01:51.08,0:01:55.62,Default,,0000,0000,0000,,So the best way I've found of trying to get people
Dialogue: 0,0:01:55.62,0:02:00.27,Default,,0000,0000,0000,,to take seriously the idea that the world may not be flat,
Dialogue: 0,0:02:00.27,0:02:04.28,Default,,0000,0000,0000,,may not even be close to flat, is with some data.
Dialogue: 0,0:02:04.28,0:02:07.66,Default,,0000,0000,0000,,So one of the things I've been doing over the last few years
Dialogue: 0,0:02:07.66,0:02:11.63,Default,,0000,0000,0000,,is really compiling data on things that could either happen
Dialogue: 0,0:02:11.63,0:02:15.78,Default,,0000,0000,0000,,within national borders or across national borders,
Dialogue: 0,0:02:15.78,0:02:19.28,Default,,0000,0000,0000,,and I've looked at the cross-border component
Dialogue: 0,0:02:19.28,0:02:21.70,Default,,0000,0000,0000,,as a percentage of the total.
Dialogue: 0,0:02:21.70,0:02:25.66,Default,,0000,0000,0000,,I'm not going to present all the data that I have here today,
Dialogue: 0,0:02:25.66,0:02:29.27,Default,,0000,0000,0000,,but let me just give you a few data points.
Dialogue: 0,0:02:29.27,0:02:33.60,Default,,0000,0000,0000,,I'm going to talk a little bit about one kind of information flow,
Dialogue: 0,0:02:33.60,0:02:38.47,Default,,0000,0000,0000,,one kind of flow of people, one kind of flow of capital,
Dialogue: 0,0:02:38.47,0:02:41.95,Default,,0000,0000,0000,,and, of course, trade in products and services.
Dialogue: 0,0:02:41.95,0:02:46.53,Default,,0000,0000,0000,,So let's start off with plain old telephone service.
Dialogue: 0,0:02:46.53,0:02:51.62,Default,,0000,0000,0000,,Of all the voice-calling minutes in the world last year,
Dialogue: 0,0:02:51.62,0:02:56.27,Default,,0000,0000,0000,,what percentage do you think were accounted for
Dialogue: 0,0:02:56.27,0:02:58.60,Default,,0000,0000,0000,,by cross-border phone calls?
Dialogue: 0,0:02:58.60,0:03:02.67,Default,,0000,0000,0000,,Pick a percentage in your own mind.
Dialogue: 0,0:03:02.67,0:03:05.77,Default,,0000,0000,0000,,The answer turns out to be two percent.
Dialogue: 0,0:03:05.77,0:03:09.91,Default,,0000,0000,0000,,If you include Internet telephony, you might be able
Dialogue: 0,0:03:09.91,0:03:13.33,Default,,0000,0000,0000,,to push this number up to six or seven percent,
Dialogue: 0,0:03:13.33,0:03:17.99,Default,,0000,0000,0000,,but it's nowhere near what people tend to estimate.
Dialogue: 0,0:03:17.99,0:03:21.74,Default,,0000,0000,0000,,Or let's turn to people moving across borders.
Dialogue: 0,0:03:21.74,0:03:24.95,Default,,0000,0000,0000,,One particular thing we might look at, in terms of
Dialogue: 0,0:03:24.95,0:03:28.68,Default,,0000,0000,0000,,long-term flows of people, is what percentage
Dialogue: 0,0:03:28.68,0:03:32.19,Default,,0000,0000,0000,,of the world's population is accounted for
Dialogue: 0,0:03:32.19,0:03:35.20,Default,,0000,0000,0000,,by first-generation immigrants?
Dialogue: 0,0:03:35.20,0:03:39.49,Default,,0000,0000,0000,,Again, please pick a percentage.
Dialogue: 0,0:03:39.49,0:03:41.92,Default,,0000,0000,0000,,Turns out to be a little bit higher.
Dialogue: 0,0:03:41.92,0:03:44.99,Default,,0000,0000,0000,,It's actually about three percent.
Dialogue: 0,0:03:44.99,0:03:49.86,Default,,0000,0000,0000,,Or think of investment. Take all the real investment
Dialogue: 0,0:03:49.86,0:03:53.02,Default,,0000,0000,0000,,that went on in the world in 2010.
Dialogue: 0,0:03:53.02,0:03:55.88,Default,,0000,0000,0000,,What percentage of that was accounted for
Dialogue: 0,0:03:55.88,0:03:59.82,Default,,0000,0000,0000,,by foreign direct investment?
Dialogue: 0,0:03:59.82,0:04:03.18,Default,,0000,0000,0000,,Not quite ten percent.
Dialogue: 0,0:04:03.18,0:04:05.82,Default,,0000,0000,0000,,And then finally, the one statistic
Dialogue: 0,0:04:05.82,0:04:09.00,Default,,0000,0000,0000,,that I suspect many of the people in this room have seen:
Dialogue: 0,0:04:09.00,0:04:11.73,Default,,0000,0000,0000,,the export-to-GDP ratio.
Dialogue: 0,0:04:11.73,0:04:15.50,Default,,0000,0000,0000,,If you look at the official statistics, they typically indicate
Dialogue: 0,0:04:15.50,0:04:18.06,Default,,0000,0000,0000,,a little bit above 30 percent.
Dialogue: 0,0:04:18.06,0:04:23.15,Default,,0000,0000,0000,,However, there's a big problem with the official statistics,
Dialogue: 0,0:04:23.15,0:04:28.08,Default,,0000,0000,0000,,in that if, for instance, a Japanese component supplier
Dialogue: 0,0:04:28.08,0:04:31.69,Default,,0000,0000,0000,,ships something to China to be put into an iPod,
Dialogue: 0,0:04:31.69,0:04:34.49,Default,,0000,0000,0000,,and then the iPod gets shipped to the U.S.,
Dialogue: 0,0:04:34.49,0:04:38.33,Default,,0000,0000,0000,,that component ends up getting counted multiple times.
Dialogue: 0,0:04:38.33,0:04:41.10,Default,,0000,0000,0000,,So nobody knows how bad this bias
Dialogue: 0,0:04:41.10,0:04:44.88,Default,,0000,0000,0000,,with the official statistics actually is, so I thought I would
Dialogue: 0,0:04:44.88,0:04:47.47,Default,,0000,0000,0000,,ask the person who's spearheading the effort
Dialogue: 0,0:04:47.47,0:04:50.73,Default,,0000,0000,0000,,to generate data on this, Pascal Lamy,
Dialogue: 0,0:04:50.73,0:04:53.24,Default,,0000,0000,0000,,the Director of the World Trade Organization,
Dialogue: 0,0:04:53.24,0:04:55.57,Default,,0000,0000,0000,,what his best guess would be
Dialogue: 0,0:04:55.57,0:04:58.75,Default,,0000,0000,0000,,of exports as a percentage of GDP,
Dialogue: 0,0:04:58.75,0:05:01.17,Default,,0000,0000,0000,,without the double- and triple-counting,
Dialogue: 0,0:05:01.17,0:05:05.70,Default,,0000,0000,0000,,and it's actually probably a bit under 20 percent, rather than
Dialogue: 0,0:05:05.70,0:05:09.47,Default,,0000,0000,0000,,the 30 percent-plus numbers that we're talking about.
Dialogue: 0,0:05:09.47,0:05:13.66,Default,,0000,0000,0000,,So it's very clear that if you look at these numbers
Dialogue: 0,0:05:13.66,0:05:17.22,Default,,0000,0000,0000,,or all the other numbers that I talk about in my book,
Dialogue: 0,0:05:17.22,0:05:21.61,Default,,0000,0000,0000,,"World 3.0," that we're very, very far from
Dialogue: 0,0:05:21.61,0:05:25.66,Default,,0000,0000,0000,,the no-border effect benchmark, which would imply
Dialogue: 0,0:05:25.66,0:05:32.57,Default,,0000,0000,0000,,internationalization levels of the order of 85, 90, 95 percent.
Dialogue: 0,0:05:32.57,0:05:36.18,Default,,0000,0000,0000,,So clearly, apocalyptically-minded authors
Dialogue: 0,0:05:36.18,0:05:39.14,Default,,0000,0000,0000,,have overstated the case.
Dialogue: 0,0:05:39.14,0:05:43.33,Default,,0000,0000,0000,,But it's not just the apocalyptics, as I think of them,
Dialogue: 0,0:05:43.33,0:05:46.55,Default,,0000,0000,0000,,who are prone to this kind of overstatement.
Dialogue: 0,0:05:46.55,0:05:49.95,Default,,0000,0000,0000,,I've also spent some time surveying audiences
Dialogue: 0,0:05:49.95,0:05:51.95,Default,,0000,0000,0000,,in different parts of the world
Dialogue: 0,0:05:51.95,0:05:56.01,Default,,0000,0000,0000,,on what they actually guess these numbers to be.
Dialogue: 0,0:05:56.01,0:05:59.08,Default,,0000,0000,0000,,Let me share with you the results of a survey
Dialogue: 0,0:05:59.08,0:06:02.42,Default,,0000,0000,0000,,that Harvard Business Review was kind enough to run
Dialogue: 0,0:06:02.42,0:06:05.94,Default,,0000,0000,0000,,of its readership as to what people's guesses
Dialogue: 0,0:06:05.94,0:06:10.35,Default,,0000,0000,0000,,along these dimensions actually were.
Dialogue: 0,0:06:10.35,0:06:16.28,Default,,0000,0000,0000,,So a couple of observations stand out for me from this slide.
Dialogue: 0,0:06:16.28,0:06:21.20,Default,,0000,0000,0000,,First of all, there is a suggestion of some error.
Dialogue: 0,0:06:21.20,0:06:24.00,Default,,0000,0000,0000,,Okay. (Laughter)
Dialogue: 0,0:06:24.00,0:06:29.48,Default,,0000,0000,0000,,Second, these are pretty large errors. For four quantities
Dialogue: 0,0:06:29.48,0:06:32.46,Default,,0000,0000,0000,,whose average value is less than 10 percent,
Dialogue: 0,0:06:32.46,0:06:36.56,Default,,0000,0000,0000,,you have people guessing three, four times that level.
Dialogue: 0,0:06:36.56,0:06:39.64,Default,,0000,0000,0000,,Even though I'm an economist, I find that
Dialogue: 0,0:06:39.64,0:06:42.05,Default,,0000,0000,0000,,a pretty large error.
Dialogue: 0,0:06:42.05,0:06:45.91,Default,,0000,0000,0000,,And third, this is not just confined to the readers
Dialogue: 0,0:06:45.91,0:06:47.87,Default,,0000,0000,0000,,of the Harvard Business Review.
Dialogue: 0,0:06:47.87,0:06:51.27,Default,,0000,0000,0000,,I've run several dozen such surveys in different parts
Dialogue: 0,0:06:51.27,0:06:54.62,Default,,0000,0000,0000,,of the world, and in all cases except one,
Dialogue: 0,0:06:54.62,0:06:57.49,Default,,0000,0000,0000,,where a group actually underestimated
Dialogue: 0,0:06:57.49,0:07:01.80,Default,,0000,0000,0000,,the trade-to-GDP ratio, people have this tendency
Dialogue: 0,0:07:01.80,0:07:04.96,Default,,0000,0000,0000,,towards overestimation, and so I thought it important
Dialogue: 0,0:07:04.96,0:07:08.27,Default,,0000,0000,0000,,to give a name to this, and that's what I refer to
Dialogue: 0,0:07:08.27,0:07:12.84,Default,,0000,0000,0000,,as globaloney, the difference between the dark blue bars
Dialogue: 0,0:07:12.84,0:07:15.85,Default,,0000,0000,0000,,and the light gray bars.
Dialogue: 0,0:07:15.85,0:07:19.99,Default,,0000,0000,0000,,Especially because, I suspect, some of you may still be
Dialogue: 0,0:07:19.99,0:07:24.18,Default,,0000,0000,0000,,a little bit skeptical of the claims, I think it's important
Dialogue: 0,0:07:24.18,0:07:27.44,Default,,0000,0000,0000,,to just spend a little bit of time thinking about
Dialogue: 0,0:07:27.44,0:07:31.20,Default,,0000,0000,0000,,why we might be prone to globaloney.
Dialogue: 0,0:07:31.20,0:07:34.04,Default,,0000,0000,0000,,A couple of different reasons come to mind.
Dialogue: 0,0:07:34.04,0:07:38.35,Default,,0000,0000,0000,,First of all, there's a real dearth of data in the debate.
Dialogue: 0,0:07:38.35,0:07:41.53,Default,,0000,0000,0000,,Let me give you an example. When I first published
Dialogue: 0,0:07:41.53,0:07:44.12,Default,,0000,0000,0000,,some of these data a few years ago
Dialogue: 0,0:07:44.12,0:07:46.66,Default,,0000,0000,0000,,in a magazine called Foreign Policy,
Dialogue: 0,0:07:46.66,0:07:50.23,Default,,0000,0000,0000,,one of the people who wrote in, not entirely in agreement,
Dialogue: 0,0:07:50.23,0:07:54.19,Default,,0000,0000,0000,,was Tom Friedman. And since my article was titled
Dialogue: 0,0:07:54.19,0:07:59.10,Default,,0000,0000,0000,,"Why the World Isn't Flat," that wasn't too surprising. (Laughter)
Dialogue: 0,0:07:59.10,0:08:03.38,Default,,0000,0000,0000,,What was very surprising to me was Tom's critique,
Dialogue: 0,0:08:03.38,0:08:08.32,Default,,0000,0000,0000,,which was, "Ghemawat's data are narrow."
Dialogue: 0,0:08:08.32,0:08:11.33,Default,,0000,0000,0000,,And this caused me to scratch my head, because
Dialogue: 0,0:08:11.33,0:08:14.47,Default,,0000,0000,0000,,as I went back through his several-hundred-page book,
Dialogue: 0,0:08:14.47,0:08:19.10,Default,,0000,0000,0000,,I couldn't find a single figure, chart, table,
Dialogue: 0,0:08:19.10,0:08:21.83,Default,,0000,0000,0000,,reference or footnote.
Dialogue: 0,0:08:21.83,0:08:26.44,Default,,0000,0000,0000,,So my point is, I haven't presented a lot of data here
Dialogue: 0,0:08:26.44,0:08:29.83,Default,,0000,0000,0000,,to convince you that I'm right, but I would urge you
Dialogue: 0,0:08:29.83,0:08:32.82,Default,,0000,0000,0000,,to go away and look for your own data
Dialogue: 0,0:08:32.82,0:08:36.30,Default,,0000,0000,0000,,to try and actually assess whether some of these
Dialogue: 0,0:08:36.30,0:08:40.66,Default,,0000,0000,0000,,hand-me-down insights that we've been bombarded with
Dialogue: 0,0:08:40.66,0:08:42.58,Default,,0000,0000,0000,,actually are correct.
Dialogue: 0,0:08:42.58,0:08:46.11,Default,,0000,0000,0000,,So dearth of data in the debate is one reason.
Dialogue: 0,0:08:46.11,0:08:50.02,Default,,0000,0000,0000,,A second reason has to do with peer pressure.
Dialogue: 0,0:08:50.02,0:08:53.20,Default,,0000,0000,0000,,I remember, I decided to write my
Dialogue: 0,0:08:53.20,0:08:55.83,Default,,0000,0000,0000,,"Why the World Isn't Flat" article, because
Dialogue: 0,0:08:55.83,0:08:59.02,Default,,0000,0000,0000,,I was being interviewed on TV in Mumbai,
Dialogue: 0,0:08:59.02,0:09:02.69,Default,,0000,0000,0000,,and the interviewer's first question to me was,
Dialogue: 0,0:09:02.69,0:09:06.64,Default,,0000,0000,0000,,"Professor Ghemawat, why do you still believe
Dialogue: 0,0:09:06.64,0:09:10.82,Default,,0000,0000,0000,,that the world is round?" And I started laughing,
Dialogue: 0,0:09:10.82,0:09:14.60,Default,,0000,0000,0000,,because I hadn't come across that formulation before. (Laughter)
Dialogue: 0,0:09:14.60,0:09:16.94,Default,,0000,0000,0000,,And as I was laughing, I was thinking,
Dialogue: 0,0:09:16.94,0:09:19.82,Default,,0000,0000,0000,,I really need a more coherent response, especially
Dialogue: 0,0:09:19.82,0:09:23.93,Default,,0000,0000,0000,,on national TV. I'd better write something about this. (Laughter)
Dialogue: 0,0:09:23.93,0:09:26.90,Default,,0000,0000,0000,,But what I can't quite capture for you
Dialogue: 0,0:09:26.90,0:09:29.50,Default,,0000,0000,0000,,was the pity and disbelief
Dialogue: 0,0:09:29.50,0:09:32.98,Default,,0000,0000,0000,,with which the interviewer asked her question.
Dialogue: 0,0:09:32.98,0:09:37.32,Default,,0000,0000,0000,,The perspective was, here is this poor professor.
Dialogue: 0,0:09:37.32,0:09:42.01,Default,,0000,0000,0000,,He's clearly been in a cave for the last 20,000 years.
Dialogue: 0,0:09:42.01,0:09:44.66,Default,,0000,0000,0000,,He really has no idea
Dialogue: 0,0:09:44.66,0:09:47.61,Default,,0000,0000,0000,,as to what's actually going on in the world.
Dialogue: 0,0:09:47.61,0:09:51.09,Default,,0000,0000,0000,,So try this out with your friends and acquaintances,
Dialogue: 0,0:09:51.09,0:09:54.53,Default,,0000,0000,0000,,if you like. You'll find that it's very cool
Dialogue: 0,0:09:54.53,0:09:57.82,Default,,0000,0000,0000,,to talk about the world being one, etc.
Dialogue: 0,0:09:57.82,0:10:01.12,Default,,0000,0000,0000,,If you raise questions about that formulation,
Dialogue: 0,0:10:01.12,0:10:05.02,Default,,0000,0000,0000,,you really are considered a bit of an antique.
Dialogue: 0,0:10:05.02,0:10:08.47,Default,,0000,0000,0000,,And then the final reason, which I mention,
Dialogue: 0,0:10:08.47,0:10:12.18,Default,,0000,0000,0000,,especially to a TED audience, with some trepidation,
Dialogue: 0,0:10:12.18,0:10:15.53,Default,,0000,0000,0000,,has to do with what I call "techno-trances."
Dialogue: 0,0:10:15.53,0:10:19.05,Default,,0000,0000,0000,,If you listen to techno music for long periods of time,
Dialogue: 0,0:10:19.05,0:10:22.41,Default,,0000,0000,0000,,it does things to your brainwave activity. (Laughter)
Dialogue: 0,0:10:22.41,0:10:25.86,Default,,0000,0000,0000,,Something similar seems to happen
Dialogue: 0,0:10:25.86,0:10:31.17,Default,,0000,0000,0000,,with exaggerated conceptions of how technology
Dialogue: 0,0:10:31.17,0:10:35.34,Default,,0000,0000,0000,,is going to overpower in the very immediate run
Dialogue: 0,0:10:35.34,0:10:38.68,Default,,0000,0000,0000,,all cultural barriers, all political barriers,
Dialogue: 0,0:10:38.68,0:10:42.27,Default,,0000,0000,0000,,all geographic barriers, because at this point
Dialogue: 0,0:10:42.27,0:10:44.85,Default,,0000,0000,0000,,I know you aren't allowed to ask me questions,
Dialogue: 0,0:10:44.85,0:10:47.83,Default,,0000,0000,0000,,but when I get to this point in my lecture with my students,
Dialogue: 0,0:10:47.83,0:10:50.59,Default,,0000,0000,0000,,hands go up, and people ask me,
Dialogue: 0,0:10:50.59,0:10:54.07,Default,,0000,0000,0000,,"Yeah, but what about Facebook?"
Dialogue: 0,0:10:54.07,0:10:56.68,Default,,0000,0000,0000,,And I got this question often enough that I thought
Dialogue: 0,0:10:56.68,0:10:59.43,Default,,0000,0000,0000,,I'd better do some research on Facebook.
Dialogue: 0,0:10:59.43,0:11:03.15,Default,,0000,0000,0000,,Because, in some sense, it's the ideal kind of technology
Dialogue: 0,0:11:03.15,0:11:06.82,Default,,0000,0000,0000,,to think about. Theoretically, it makes it
Dialogue: 0,0:11:06.82,0:11:10.20,Default,,0000,0000,0000,,as easy to form friendships halfway around the world
Dialogue: 0,0:11:10.20,0:11:13.20,Default,,0000,0000,0000,,as opposed to right next door.
Dialogue: 0,0:11:13.20,0:11:19.28,Default,,0000,0000,0000,,What percentage of people's friends on Facebook
Dialogue: 0,0:11:19.28,0:11:22.40,Default,,0000,0000,0000,,are actually located in countries other than where
Dialogue: 0,0:11:22.40,0:11:25.68,Default,,0000,0000,0000,,people we're analyzing are based?
Dialogue: 0,0:11:25.68,0:11:29.03,Default,,0000,0000,0000,,The answer is probably somewhere between
Dialogue: 0,0:11:29.03,0:11:31.90,Default,,0000,0000,0000,,10 to 15 percent.
Dialogue: 0,0:11:31.90,0:11:35.71,Default,,0000,0000,0000,,Non-negligible, so we don't live in an entirely local
Dialogue: 0,0:11:35.71,0:11:40.72,Default,,0000,0000,0000,,or national world, but very, very far from the 95 percent level
Dialogue: 0,0:11:40.72,0:11:44.12,Default,,0000,0000,0000,,that you would expect, and the reason's very simple.
Dialogue: 0,0:11:44.12,0:11:48.12,Default,,0000,0000,0000,,We don't, or I hope we don't, form friendships at random
Dialogue: 0,0:11:48.12,0:11:52.94,Default,,0000,0000,0000,,on Facebook. The technology is overlaid
Dialogue: 0,0:11:52.94,0:11:57.67,Default,,0000,0000,0000,,on a pre-existing matrix of relationships that we have,
Dialogue: 0,0:11:57.67,0:12:00.74,Default,,0000,0000,0000,,and those relationships are what the technology
Dialogue: 0,0:12:00.74,0:12:03.97,Default,,0000,0000,0000,,doesn't quite displace. Those relationships are why
Dialogue: 0,0:12:03.97,0:12:08.02,Default,,0000,0000,0000,,we get far fewer than 95 percent of our friends
Dialogue: 0,0:12:08.02,0:12:11.82,Default,,0000,0000,0000,,being located in countries other than where we are.
Dialogue: 0,0:12:11.82,0:12:17.31,Default,,0000,0000,0000,,So does all this matter? Or is globaloney
Dialogue: 0,0:12:17.31,0:12:22.72,Default,,0000,0000,0000,,just a harmless way of getting people to pay more attention
Dialogue: 0,0:12:22.72,0:12:25.43,Default,,0000,0000,0000,,to globalization-related issues?
Dialogue: 0,0:12:25.43,0:12:27.64,Default,,0000,0000,0000,,I want to suggest that actually,
Dialogue: 0,0:12:27.64,0:12:32.21,Default,,0000,0000,0000,,globaloney can be very harmful to your health.
Dialogue: 0,0:12:32.21,0:12:35.36,Default,,0000,0000,0000,,First of all, recognizing that the glass
Dialogue: 0,0:12:35.36,0:12:39.82,Default,,0000,0000,0000,,is only 10 to 20 percent full is critical to seeing
Dialogue: 0,0:12:39.82,0:12:43.20,Default,,0000,0000,0000,,that there might be potential for additional gains
Dialogue: 0,0:12:43.20,0:12:45.23,Default,,0000,0000,0000,,from additional integration,
Dialogue: 0,0:12:45.23,0:12:48.07,Default,,0000,0000,0000,,whereas if we thought we were already there,
Dialogue: 0,0:12:48.07,0:12:51.50,Default,,0000,0000,0000,,there would be no particular point to pushing harder.
Dialogue: 0,0:12:51.50,0:12:54.71,Default,,0000,0000,0000,,It's a little bit like, we wouldn't be having a conference
Dialogue: 0,0:12:54.71,0:12:58.89,Default,,0000,0000,0000,,on radical openness if we already thought we were totally open
Dialogue: 0,0:12:58.89,0:13:02.22,Default,,0000,0000,0000,,to all the kinds of influences that are being talked about
Dialogue: 0,0:13:02.22,0:13:03.64,Default,,0000,0000,0000,,at this conference.
Dialogue: 0,0:13:03.64,0:13:08.43,Default,,0000,0000,0000,,So being accurate about how limited globalization levels are
Dialogue: 0,0:13:08.43,0:13:11.49,Default,,0000,0000,0000,,is critical to even being able to notice
Dialogue: 0,0:13:11.49,0:13:15.17,Default,,0000,0000,0000,,that there might be room for something more,
Dialogue: 0,0:13:15.17,0:13:19.13,Default,,0000,0000,0000,,something that would contribute further to global welfare.
Dialogue: 0,0:13:19.13,0:13:21.97,Default,,0000,0000,0000,,Which brings me to my second point.
Dialogue: 0,0:13:21.97,0:13:26.19,Default,,0000,0000,0000,,Avoiding overstatement is also very helpful
Dialogue: 0,0:13:26.19,0:13:30.98,Default,,0000,0000,0000,,because it reduces and in some cases even reverses
Dialogue: 0,0:13:30.98,0:13:35.79,Default,,0000,0000,0000,,some of the fears that people have about globalization.
Dialogue: 0,0:13:35.79,0:13:39.17,Default,,0000,0000,0000,,So I actually spend most of my "World 3.0" book
Dialogue: 0,0:13:39.17,0:13:43.72,Default,,0000,0000,0000,,working through a litany of market failures and fears
Dialogue: 0,0:13:43.72,0:13:48.86,Default,,0000,0000,0000,,that people have that they worry globalization is going to exacerbate.
Dialogue: 0,0:13:48.86,0:13:52.53,Default,,0000,0000,0000,,I'm obviously not going to be able to do that for you today,
Dialogue: 0,0:13:52.53,0:13:55.79,Default,,0000,0000,0000,,so let me just present to you two headlines
Dialogue: 0,0:13:55.79,0:13:59.08,Default,,0000,0000,0000,,as an illustration of what I have in mind.
Dialogue: 0,0:13:59.08,0:14:03.39,Default,,0000,0000,0000,,Think of France and the current debate about immigration.
Dialogue: 0,0:14:03.39,0:14:06.62,Default,,0000,0000,0000,,When you ask people in France what percentage
Dialogue: 0,0:14:06.62,0:14:08.84,Default,,0000,0000,0000,,of the French population is immigrants,
Dialogue: 0,0:14:08.84,0:14:13.34,Default,,0000,0000,0000,,the answer is about 24 percent. That's their guess.
Dialogue: 0,0:14:13.34,0:14:17.97,Default,,0000,0000,0000,,Maybe realizing that the number is just eight percent
Dialogue: 0,0:14:17.97,0:14:22.38,Default,,0000,0000,0000,,might help cool some of the superheated rhetoric
Dialogue: 0,0:14:22.38,0:14:25.72,Default,,0000,0000,0000,,that we see around the immigration issue.
Dialogue: 0,0:14:25.72,0:14:29.86,Default,,0000,0000,0000,,Or to take an even more striking example,
Dialogue: 0,0:14:29.86,0:14:32.04,Default,,0000,0000,0000,,when the Chicago Council on Foreign Relations
Dialogue: 0,0:14:32.04,0:14:35.39,Default,,0000,0000,0000,,did a survey of Americans, asking them to guess
Dialogue: 0,0:14:35.39,0:14:39.61,Default,,0000,0000,0000,,what percentage of the federal budget went to foreign aid,
Dialogue: 0,0:14:39.61,0:14:43.29,Default,,0000,0000,0000,,the guess was 30 percent, which is
Dialogue: 0,0:14:43.29,0:14:48.65,Default,,0000,0000,0000,,slightly in excess of the actual level — ("actually about ... 1%") (Laughter) —
Dialogue: 0,0:14:48.65,0:14:52.03,Default,,0000,0000,0000,,of U.S. governmental commitments to federal aid.
Dialogue: 0,0:14:52.03,0:14:55.44,Default,,0000,0000,0000,,The reassuring thing about this particular survey was,
Dialogue: 0,0:14:55.44,0:14:58.12,Default,,0000,0000,0000,,when it was pointed out to people how far
Dialogue: 0,0:14:58.12,0:15:01.32,Default,,0000,0000,0000,,their estimates were from the actual data,
Dialogue: 0,0:15:01.32,0:15:04.42,Default,,0000,0000,0000,,some of them — not all of them — seemed to become
Dialogue: 0,0:15:04.42,0:15:08.41,Default,,0000,0000,0000,,more willing to consider increases in foreign aid.
Dialogue: 0,0:15:08.41,0:15:11.53,Default,,0000,0000,0000,,So foreign aid is actually a great way
Dialogue: 0,0:15:11.53,0:15:14.72,Default,,0000,0000,0000,,of sort of wrapping up here, because
Dialogue: 0,0:15:14.72,0:15:17.81,Default,,0000,0000,0000,,if you think about it, what I've been talking about today
Dialogue: 0,0:15:17.81,0:15:21.90,Default,,0000,0000,0000,,is this notion -- very uncontroversial amongst economists --
Dialogue: 0,0:15:21.90,0:15:24.88,Default,,0000,0000,0000,,that most things are very home-biased.
Dialogue: 0,0:15:24.88,0:15:28.11,Default,,0000,0000,0000,,"Foreign aid is the most aid to poor people,"
Dialogue: 0,0:15:28.11,0:15:31.83,Default,,0000,0000,0000,,is about the most home-biased thing you can find.
Dialogue: 0,0:15:31.83,0:15:34.87,Default,,0000,0000,0000,,If you look at the OECD countries and how much
Dialogue: 0,0:15:34.87,0:15:38.01,Default,,0000,0000,0000,,they spend per domestic poor person,
Dialogue: 0,0:15:38.01,0:15:40.26,Default,,0000,0000,0000,,and compare it with how much they spend
Dialogue: 0,0:15:40.26,0:15:44.44,Default,,0000,0000,0000,,per poor person in poor countries,
Dialogue: 0,0:15:44.44,0:15:48.71,Default,,0000,0000,0000,,the ratio — Branko Milanovic at the World Bank did the calculations —
Dialogue: 0,0:15:48.71,0:15:53.38,Default,,0000,0000,0000,,turns out to be about 30,000 to one.
Dialogue: 0,0:15:53.38,0:15:59.58,Default,,0000,0000,0000,,Now of course, some of us, if we truly are cosmopolitan,
Dialogue: 0,0:15:59.58,0:16:02.75,Default,,0000,0000,0000,,would like to see that ratio being brought down
Dialogue: 0,0:16:02.75,0:16:04.98,Default,,0000,0000,0000,,to one-is-to-one.
Dialogue: 0,0:16:04.98,0:16:08.37,Default,,0000,0000,0000,,I'd like to make the suggestion that we don't need to aim
Dialogue: 0,0:16:08.37,0:16:12.53,Default,,0000,0000,0000,,for that to make substantial progress from where we are.
Dialogue: 0,0:16:12.53,0:16:17.60,Default,,0000,0000,0000,,If we simply brought that ratio down to 15,000 to one,
Dialogue: 0,0:16:17.60,0:16:20.97,Default,,0000,0000,0000,,we would be meeting those aid targets that were agreed
Dialogue: 0,0:16:20.97,0:16:24.49,Default,,0000,0000,0000,,at the Rio Summit 20 years ago that the summit
Dialogue: 0,0:16:24.49,0:16:28.35,Default,,0000,0000,0000,,that ended last week made no further progress on.
Dialogue: 0,0:16:28.35,0:16:32.15,Default,,0000,0000,0000,,So in summary, while radical openness is great,
Dialogue: 0,0:16:32.15,0:16:34.17,Default,,0000,0000,0000,,given how closed we are,
Dialogue: 0,0:16:34.17,0:16:37.14,Default,,0000,0000,0000,,even incremental openness could make things
Dialogue: 0,0:16:37.14,0:16:40.77,Default,,0000,0000,0000,,dramatically better. Thank you very much. (Applause)
Dialogue: 0,0:16:40.77,0:16:43.54,Default,,0000,0000,0000,,(Applause)