 We're coming to the keynote session at this year's APSA conference, which will be presented to us by Professor Donald Emerson. He has specifically requested that I don't give you a long-winded bibliography, but just introduce him, so here he is. Thank you. Thank you. That is not only the most recent introduction I've ever had, it's the best. It really is. Thank you. You know, valuing the time of the speaker rather than repeating a bunch of, you know, baloney from some CD. All right. It's delightful to be here. I've had a wonderful couple of days, saw a bunch of roos, and enjoyed the beautiful weather. I'm not a complete stranger to Australia, but I wish I could spend more time here. And I think it's particularly appropriate. In fact, as I was walking through the Museum of Democracy on my way here, I noticed an exhibit designing democracy. And of course, that's very close not only to the theme of our conference, but to the talk that, for better or worse, I am about to give. Crisis uncertainty on democracy, black swan's fat tails, the futures of political science. This talk, I hope, will have two parts. I want to start with some thoughts on the intersections of these three phenomena, crisis uncertainty and democracy. You could think of a triangle whose points are defined by the three abstractions, generating three sides, each of them a dyad, a pair, with interaction going on between two abstractions, and that will more or less give you a sort of geometric notion of something I'll try to say, although my presentation will be a lot messier than that rather hygienic image. And I then want to offer, assuming I have time, which with me is always a problem. Incidentally, how long do you want me to talk? Two half-busts, two half-busts, two half-busts. Really? Okay. I'll leave time for discussion. If I do have time, otherwise I may end up sandwiching it into the discussion itself to try to draw some inferences from what I will have said for political science and also particularly for the nature and future of political institutions. Now these are cosmic subjects, truly vast subjects, and the hubris that is required to address such cosmic subjects is obvious. But you must remember that I am an American. Hubris has long been our national brand. That is what we used to do. And thus, perhaps for old-time's sake, I may be indulged in this one last nostalgic act of sheer presumption. As my country implements conventional wisdom by sinking rapidly into geopolitical oblivion, turning into a version of what we used to call the Soviet Union, namely upper Volta with rockets, although we may not be able to afford the rockets, in which case we will become merely upper Volta, which prophetically no longer exists. All right. End of intro. This is part one, crisis and uncertainty, the first side of the triangle. Black swans, fat tails, tipping points, outliers, randomness. I assume this literature, which you can hardly avoid when you walk through an airport book shop, is more or less familiar to all of you, or at least the terminology is familiar. Although I gather that Nassim Taleb did not have Australia in mind when he coined the term black swan because I am told on impeccable indigenous authority that actually most of your swans are black, and that the exception would be a white swan, and perhaps that's appropriate given the hemisphere that we're on, but it's good to keep that in mind. I won't go into all of these sort of terminology, the terms to define them in any detail, except to assume that we all know that a black swan, actually a black swan by Nassim Taleb's definition, has a third element which tends to get kind of dropped out, and I won't use today, but the essential two elements of the definition of a black swan, as I'm sure you all know, is an extremely consequential but also unpredicted event. Fat tails, of course, refers to the extension of a normally, ostensibly normal distribution. The fatter they are, the more anomalies you have, et cetera. Now, it's interesting in and of itself to notice this discourse, and I could, of course, you know, the standard temptation is not to do any empirical research at all and simply generate discourse about discourse, the meta strategy that many of us use because it's more fun just sitting around your office than actually going out trying to interview people. I am going to avoid that to the extent that I can, but I am well aware of the sort of idiosphere that enraps us, and the sense in which, remarkably as the recent years have gone by, the emphasis has been on abnormality, on irregularity. If you will, you might call this the sort of age of endless surprise, which, of course, come to think of it, doesn't work because if the surprise is endless, it's no longer surprising, but anyway. It seems important to me on this first comparison to distinguish crisis from uncertainty. Distinguish them quite sharply. The empirical case for the proposition that the world has become more crisis prone is not negligible. I mean, just to take a few obvious examples from the global economy, the Latin American financial crisis, 1982, the Asian financial crisis, 1997, that's 15 years later, and then 10 years later, what, at least in terms of its origin, I think we are obliged to call the American financial crisis of 2008. And I guess extrapolating this accelerating sequence, the next financial crisis will arrive after five years from 2008, which would be 2013. But of course, that wouldn't work because that implies a regularity, a predictability, which violates the popularity of surprise. When a crisis does arrive, it is typically evident to all. Uncertainty, in contrast, is a kind of background condition that is often unremarkable. Everyone is always uncertain as to exactly what tomorrow will bring, but that is not necessarily a cause of fear. The unspoken assumption that the title of our conference evokes, at least in my mind, is that crisis and uncertainty are both becoming more and more common in our world. Now, as a working hypothesis, I would suggest instead that it is only crises of a certain kind that are becoming more common. Namely, crises that are a function of the complexity and interconnection associated with globalization. I think the case for increasing complexity is empirically impeccable. And what is happening is a proliferation of a particular genre, if you will, of crisis, which is very much related to the increasing complexity that the world, and also the internet character of the world, internet and internet actually, and the vulnerability that tends to stem from that. As for uncertainty, I would argue that when it comes to personal affairs, it's important to keep in mind that the case for increasing uncertainty is weaker, much weaker, than it is for increasing geoeconomic and geopolitical crises on a global scale. After all, let's remember that uncertainties over food, shelter, safety jobs, and education for themselves and their children certainly do remain the daily experience of a great many people. But since 1990, is to take a fairly recent date. Poverty has decreased in every region of the world, and this is true especially of Asia, as I'm sure you know. In recent decades, some three-quarters of a billion Asians have left poverty behind, and with it their relative exposure to uncertainties of a life and welfare jeopardizing kind. It's interesting that in the realm of hedge fund analysts, these what I like to call street economists pride themselves on their ability to transform, or I suppose, domesticate, uncertainty into risk. The difference between uncertainty and risk in this cohort of professionals is important, and it's interesting to note that in political science, and you're free to correct me during the Q&A, probably because I haven't read enough, I'm willing to say that in political science, we haven't really pursued that. That is to try to turn political uncertainty as a concept into something operationally that we could consider political risk. I think that's a fascinating frontier. It involves a lot of methodological questions that I really don't have time or for that matter, the expertise really to get into. It also has to do with the extent to which, after all, uncertainty implies unpredictability, and for everyone who calls herself or himself a political scientist, it would be interesting to turn introspectively into one's own conception of the discipline and ask to what extent successful prediction should be a criterion of achievement. Now, post-diction, which is sort of cheating, right? That's what historians do. You explain the past. Prediction, looking into the future, is much more difficult. But there is an increasing sort of zone of political science, at least to my limited awareness, that is involved in an effort to try to systematically and seriously approach the question of unpredictability. The problem is that it's a rather arcane subfield. I'm getting a little off the topic here. But my colleague, Bruce Gueno de Mesquita, whose work some of you may be familiar with, reportedly has a 90% success rate predicting extraordinary political events around the world, which sounds absolutely astounding until you realize that that record has been compiled primarily in consultation with the Central Intelligence Agency and therefore is off the record and unprovable, at least to the public eye. And I sometimes tease him about that. His latest prediction, I don't know if this is off the record or not, but the latest prediction is that the regime in Tehran will fall. And there was a time not so long ago where it looked like it might. So it's not an irrational notion. But over the last, I don't know, nine, 10 months to a year, every now and then when I run into Bruce in the line in the cafeteria, I say, well, how are things in Iran? And of course, he says, well, I mean, I didn't attach a time limit to it. But of course, eventually we're all dead, right? So that's a certainty that if you say it now, eventually it'll come true. Okay, back to the point. Uncertainty and democracy is the next kind of pair that I would like to deal with. And I'm moving rather too rapidly forward in order not to run out of time. Uncertainty and democracy. Well, the first and most obvious thing that one should say is that democracy is institutionalized uncertainty. Democracy is institutionalized uncertainty. If electoral outcomes were certain, after all, they would not be democratic. In many compromised democracies in developing countries, what is needed, it seems to me, is not less uncertainty in public life, but more. Acknowledging the importance of uncertainty of outcomes in the justification of democracy should serve as a useful restraint on the temptation to curb uncertainty in democracy's name. And since uncertainty is intrinsically neither good nor bad, political scientists can help citizens and policymakers differentiate between and estimate the consequences of different kinds of uncertainty as they impact democracy. Consider, for example, these two political uncertainties as they relate to democracy. Uncertainty of actor support and uncertainty of ostensible result. The language is a little awkward. By uncertainty of actor support, I mean to capture the fear that political actors opposed to democracy will use it to overthrow it. That they may believe only and cynically in, you've heard the phrase, one person or for chauvinist pigs, one man, one vote, one time, one time. Only one time. And this concern strikes me as overblown. Perhaps I'm being complacent. Take the fear that if an avowedly Muslim political party is allowed to compete in a democratic election, wins, and becomes the government, it will surely cancel all further elections in order to remain in power under the law of Allah. It was this uncertainty and the associated fear, as you will recall, that led the Algerian government in 1991 to cancel the second round of an election that an Islamist party was expected to win, which set the stage for a coup and a civil war that lasted nearly a decade and cost up to 200,000 Algerian lives. Arguably a far worse outcome than if the election had been held and the Islamist party had won and been allowed to take office. That fear, as you know, has been rekindled by the era of spring and the prospect of future electoral success by the Ikhwan, Muslimin, the Muslim brotherhood. And yet there is no historical evidence to suggest that the Ikhwan will behave in this manner. Not only has the brotherhood in Egypt been careful to avoid, alleviate such fears by publicly limiting its political ambitions. The prospect of holding office has led to splits in the leadership, just in recent months. More generally, one would have to say that in Muslim majority countries, political Islam has been a spectacular electoral failure. Now you're free to contest that during the discussion. And when they do become incumbents, Islamists have shown that they are not immune to corruption, a failing that has proven, as you would expect, especially damaging to them, given their claim to a superior, religiously mandated morality. Next door in Indonesia, the justice and welfare party is a case in point. My second example is uncertainty of a sensible result. By that, I mean to capture the difference between conditional and unconditional belief in democracy. Uncertainty is central to the nature of conditional belief. If democracy delivers needed public goods, I'll support it. But if it fails to do so, I'll consider replacing it with something else, something that actually works. Deng Xiaoping is not known as a theorist of democracy, but his pragmatic logic nicely embodies that conditional stance. I don't care if the cat is black or white, as long as it catches mice. Certainty is central, certainty is central to the nature of unconditional belief. A deeply rooted faith in democracy, not as a means to some desired result, but as an end in and of itself, on sick, reversing Deng's dictum to read. I don't care if the cat catches mice so long as it is black, right? That's a kind of unconditional, I suppose you could say, ideological commitment to democracy. You might even generate an interesting research design, which would look something like this. Let's just imagine that democracy causes the GDP to drop by 1%. Would you still go for democracy? All right, 1%, no problem. Well, what about 10%, what about 15%, 25%, that's right. At some point, even a religious believer in democracy as the only possibility is going to have his or her faith somewhat shaken. So this is a variable. It varies from day to day, year to year in a given population. Of course, it varies from country to country across populations at any moment in time. This unconditional or non-negotiable view of democracy, I don't care if it catches mice or not, seems, I think to many of us, outlandish. But it seems, to me anyway, least outlandish in the United States. Where to quote the American Declaration of Independence, we take these truths to be self-evident. Now, what does that mean? That means I don't need to offer you any evidence at all. No proof. It's a matter of faith. It's a complete rejection of an empirical exercise. In a way, it's an insult to political science. And so far as political science is relativistic about the relative benefits of different political formats and regimes. It amounts to saying in Dung's terms, my cat will always be black. Don't talk to me about the mice. Now, democracy is said to have become institutionalized when it is, quote, the only game in town. You've heard that often. But even if that condition is achieved, it may not be the only game in other towns or the only game that can be imagined in the minds of citizens frustrated by what they perceive as the inability of the one and only democratic game being played in their country to maintain, let alone to improve their life circumstances. If I had time, I would go into a detour through the Beijing consensus. We all know about the Washington consensus and the existence or non-existence of the Beijing consensus is increasingly becoming a topic for academic and also non-academic, I must say, research and comment. I should perhaps note not sure what the Confucius Institutes in Australia are up to these days. But at Stanford University, we have a Confucius Institute, which sponsored a conference just a few months ago on Tiansha, which I suppose, since I don't speak Chinese, I'm not sure but should be translated approximately as Order Under Heaven. And this notion of Tiansha was discussed as a possible basis for a Beijing consensus that would elbow aside the Anglo kind of individualistic, western notion of liberal democracy. So this would be a communitarian kind of democracy in which harmony, that's the buzzword that we run across very often in statements by Chinese leaders. Harmony would replace the kind of conflict. I mean, if I said democracy is institutionalized uncertainty, of course it is also institutionalized conflict, at least the liberal notion of democracy. Okay, there is a big difference between changing the players in a game and replacing the game itself. Here I can't resist quoting this morning's Sydney Morning Herald. That's what speakers do, they buy all the newspapers to see if they can work something in. The latest annual Scanlon Foundation survey of Australian public opinion reports that from 2009, it's an annual survey as you know, from 2009 to 2011, the proportion of respondents who think that the government can, quote, almost never be trusted to do the right thing for the Australian people, more than doubled from 8 to 20%, one-fifth. Now that may sound perilous, but how many of those respondents would replace the political system itself rather than merely replacing the political actors who form the government? Nevertheless, if the current global financial crisis is not resolved, but deepens into a global depression, the proportion of conditional versus unconditional Democrats around the world will surely increase, rendering more uncertain the very future of democracy, at least in its liberal, individual-focused form, which brings me to the last of my three pairs of concepts, democracy and crisis. Interviewed 10 years ago in the immediate aftermath of the arrival of a huge, okay, Australian white swan, an unpredicted, highly consequential event, namely the terrorist attacks of 9-11. My political science colleague David Layton, a comparative politics, you may be familiar with his work, I'm sure you are, predicted that 10 years later, that is now in 2011, the legitimacy of democracy would have declined. Now I don't want to exaggerate this decline in the legitimacy of democracy, but I believe he was right, and if I had time I could generate, I think, some hopefully more than anecdotal evidence to that effect. Certainly among political scientists in the United States, there is no question that the discourse has shifted from a, definitely shifted from a celebration of the third wave, the famous third wave, as the Freedom House ratings are ratcheted upward, right, in linear fashion. And then, you know, partly, of course, not just partly, but in a major sort of way, as a consequence of the end of the Cold War, but then things begin to go sour, and you get a plateau over the last, what, four, five years, and then you get slippage. And so the focus of much academic discussion in the United States among political scientists in our APSA, if I can put it that way, although I know the S here stands for studies, which is somewhat more tolerant, somewhat more eclectic, more comfortably, sort of, from an epistemological point of view. In any case, the topic of conversation is very often on the quality of democracy, not the quantity. So it's not just the numbers, the ranking of a given country, but what is actually going on on the ground. I find that a very constructive thing, because it drives us into the field. Generally speaking, without trying to be too flip, I have to say that Emmanuel Kant has been replaced as a source of quotation by Reinhold Niebuhr, maybe Isaiah Berlin, the crook and timber of humanity, that kind of an argument. There's a certain mourning after the third wave of fact that is quite noticeable, it seems to me, in American political science. Having said that, I want to shift into what I hope will be the one sort of, aside from what I've said, if there's anything of interest there, I'm delighted. But the one kind of somewhat novel focus that I hope I can bring to this particular talk. And since I'm running out of time, let me just sort of summarize it and then try to fill in just a few details. It is the notion in the relationship between crisis and democracy that the increasing incidence of crises of that global nature that I've talked about, particularly the financial crises, other examples related to connectivity, the Facebook on Tahrir Square, et cetera, that those kinds of crises are stimulating institutional innovation in a way that I don't believe has been noticed. And this institutional innovation could be loosely described, although I haven't really got a clear handle on it yet. So something I've been thinking about, and I did write something about it recently, but just very tentatively, one might say that it is an effort to arrive at institutions that have the optimal trade-off between effectiveness and representation. Now, let me back off a little bit from that and give a little bit of the context here. Let's look through the rest of the 21st century. And let's ask the question, what will be the proportion of problems that are properly settled in a cockpit versus problems that are properly solved in a community? So there's a contrast between cockpit problems and community problems. What do I mean? The pilot in the cockpit who is in mid-air facing an on-rushing plane is not going to get on the public address system and ask the passengers to vote whether he or she should turn right or left or move up or down. That's a cockpit problem. The consequences of doing nothing are horrendous in this particular case. The urgency is extreme. If democracy is time-intensive, which it clearly is, because it implies consultation, to the extent that it verges on the need for unanimity, it enables, obviously, the lowest common denominator to prevail. The spectacle of the U.S. Congress unable to act, paralyzed, deadlocked because of the necessity of involving everyone on the floor, filibustering opportunities and so forth. This is all known to all of us. And this, if you will, weakness of democracy is particularly glaring in the face of cockpit problems. Now, a community problem is very different. Maybe there's a zoning issue. Maybe there's a trade-off. Should we decide to let the factory in and take the pollution but enjoy the jobs? You see what I'm saying? Or should we keep it out and be green but maybe having more unemployment? These kinds of issues. Not to mention, of course, the question of the nature of the Constitution itself, which has to do with the rules of the game, which is not really an urgent matter and even the issue of building the factory unless, of course, the factory may be withdrawn if the community waits too long to vote. Those are community kinds of problems in which the interest of the community is clearly involved. And my argument here is that you can construct a sort of pyramid of decision points, of venues for decision, and yes, of institutions, from the most to the least participatory. You know, Harry Truman, the buck stops here, right? After all the chit-chat below, it arrives at my desk and I make the decision, right? It's interesting to look at the super committee that has been set up in Washington 12 individuals, six from the Democratic Party, six from the Republican Party involving equally both houses of Congress that have until the 23rd of November to come up with more than a trillion dollar in cuts to reduce the deficit and if they do not reach agreement, or if they do reach agreement and by the 23rd of December their agreement is rejected by Congress because this is a democracy after all then automatic cuts will kick in. I think you know this. This is actually, it's sort of, you know, it's what you would expect maybe an alcoholic to figure out in order to stop the alcoholic from drinking. It's actually, it's a democratic effort to work out a very undemocratic procedure, right? I think it has something to do with, forgive me, this is really pretty wild, with the Supreme Court. In the United States, the nine members of the Supreme Court are not subject to being fired and they weren't elected to begin with. They cease to hold office by falling off the dice. This is highly undemocratic. The Federal Reserve is, again, what might be called, I don't know if this is going too far or not, a pocket of autocracy. A pocket of autocracy inside a democracy in order to solve that problem of the trade-off between effectiveness and representation. If you have too many people involved in the decision, cooks spoil the broth. It'll take forever. And in the meantime, the economy is tanking. And so you have to have certain isolated points, nodes, if you will, of decision-making within a democratic system that will to some extent, quote, unquote, hopefully try to keep it honest. And my argument is that this kind of institutional innovation is becoming, and as far as I can tell, will continue to be increasingly common. At least the need for it, if not the responsiveness to it. In fact, I do want to say that the problem with this argument it easily could be taken as a highly elitist argument to concentrate expertise and all the really difficult urgent questions should escalate upward to the philosopher King. And I don't mean that at all. In fact, I recall vividly in the year 2000 that a 7-2 decision of the U.S. Supreme Court elevated into the White House a president of the United States who had actually lost the popular vote and who in my judgment, near free to quote me, will go down in history as being one of the very worst presidents the United States has ever had. So I'm not saying that pockets of autocracy necessarily produce the right solutions, but they are a natural response to the need to move quickly and to concentrate expertise. That's what the pilot has in the cockpit, the expertise that the passengers lack. Let me give you another example from a totally different venue. And I do this on purpose so that I'm trying to kind of make the case for the generality of the phenomenon that I hope I'm actually seeing in the real world. Cloud computing. We know that one of the problems we are facing and will continue to face, possibly in more and more acute form, is cyber sabotage. Hacking. Anonymous. Now, you know, I read the WikiLeaks, they're great, so I have some mixed feelings about at least that aspect. I must say there may be individuals around the world who have suffered or will suffer personally because their identities, especially in the latest batch, were identified, although I'm struck by the rather mild character of the revelations as far as individual personalities are concerned. But the issue of privacy, the issue of breaching electronic defenses, there are many, many examples that I can point to. The, some would call it a crisis of cyber security, is very much linked to the question of cloud computing. Now, you may already know all about cloud computing. I'm just going to say this. There has been a, and it's maybe because I live in Silicon Valley, otherwise I wouldn't be aware of it. There has been a modification of something, and I don't really know what this means, but I'll just read it, called the Internet Engineering Task Forces Domain Name Systems Security Extensions to create a trifocal defense against cyber sabotage, consisting of three locations, three venues, Singapore, Zurich, and Silicon Valley, that is San Jose, California. And cloud computing, which as you know, the idea is to essentially store your stuff on the cloud, rather than putting it into your laptop where people can sneak in and steal it or alter it. And these three redoubts, they'll be like what an American would think of those Fort Knox, where all the gold is, right, are going to be protected physically and electronically in a way that will make them absolutely, they say, impregnable and invulnerable to attack. Now, I don't have any friends in the hacker community, but I do have a number of friends on the other side of that equation who work for Stanford to try to prevent breaching our security systems, who are of the opinion that creating these three locations will be like creating honeypots for the hackers. The pride that one would be able to acquire by hacking into the Zurich bastion, you can see where that's going to be going. So I'm not suggesting that this arrangement will be successful. I am using it, however, to illustrate from a radically different domain my proposition that the ubiquity and increasing frequency of crises of this certain kind is generating a need, a felt need for a certain kind of institution, which is somewhere on the slopes of the mountain, right? Here's some other examples. G20, it's not a G1, obviously. I mean, you know, the United States supposedly is on the way down, so that's not an option. It's not a G2 with China. It's not a G7. It's not a G8 with Russia. It's a G20. Now, why is it that the G20 has emerged rather suddenly, right, since 2008 as a venue for taking decisions with regard to the global financial crisis? I mean, I don't know. With all due respect, if we were at a meeting of the G20, it's coming up in Cannes in November, right? The heads of state will be there. Presumably your head of state, certainly my head of state, will all be around the table. And if you look around the table, how many of them will be experts on finance? Well, presumably they'll have some advisors in tow. But you can see where I'm headed. The number 20 is a gesture toward representation and the legitimacy that comes with representation, especially insofar as if you add up the GDP that is accounted for by these 20 countries, it's pretty massive, not to mention the population. China's there, as you know, and so forth, Australia as well. But it's not a G1, which would be illegitimate, which would no longer be credible. These are compromises on the slopes of institutional differentiation. Now, it'll be interesting to see, I'll try to end here in just a minute. November, okay? November is in a way going to be a test sort of of this idea. Why? Because we have three meetings in rapid order. We start in Cannes with the G20. We move to Honolulu for the APEC meeting, and then we go to Bali for the East Asia summit. Now, the APEC meeting is a huge meeting. It includes, as you know, not only Asian economies, it includes Latin American economies as well. And there have been complaints from the Asians for years and years that we just get the Latin Americans out of the room. I mean, they have different problems than we do. Their economies are different. They're locked into a pattern with the United States that we don't particularly have. And there are many who say that APEC is failing because it's too large. It's down at the base of the pyramid and cannot reach agreement. The Doha round. What better example to cite as an example of how diversity sabotages efficacy. Okay? Or at least participation sabotages efficacy. Another example drawn from a crisis that resulted in some learning actually because I don't want to suggest that crises are all to be regretted. You can have a constructive crisis. We remember that the Asian financial crisis was the stimulus for the formation of ASEAN plus three and of the Chiang Mai initiative, which among all of the various efforts to put together alphabet soup, right? Arrangements in East Asia in my possibly incorrect judgment has been remarkably successful. Its success is in part related to the ability of the Chiang Mai initiative to involve in decisions with regard to finance only those economies that matter so that Laos is not at the table, which is a violation I suppose democratically of Laos' right to be there but is a tremendous advantage insofar as one can get on with the business among countries that can actually influence the state of finance, trans-nationally in the East Asian region. All right, I think I will end with the following conclusion if I may and then I really will end. If democracy requires uncertainty of outcomes in order to remain democratic and uncertainty is a necessary if insufficient condition for the occurrence of a crisis, it follows that the challenge for Democrats is not to prevent crises in general. It is rather to design and promote institutions and policies that can cope with crises effectively and legitimacy. We are living in a time that an Indonesian would call pancaroba massive, sweeping, crisscrossing waves of change. World affairs in the 21st century are becoming simultaneously more complex and less certain. Complexity and uncertainty are interacting in ways that pose challenges to global, regional and national security and such challenges are rationalizing and rendering urgent the case for more optimal institutions and the need for political scientists to help design them. Thank you. I really stimulated you. You said that crises were things that everyone recognized but lately you talked about the need for expertise to address crises where you get the cockpit situation. Isn't there a kind of a contradiction there because if you take climate change you've got a clear situation where you've got a narrow window of opportunity to make a difference but the crisis is not able to. In fact it's wildly expected and we can't simply visit the pond on us but it's such a good generation to say it certainly is but it's not one that lends itself to a complex solution because it's so complicated to that side. A different type of challenge with the multilateral negotiations that have been increasingly lighted through donor negotiations and everyone has put forward this critical last idea that you just round up to major business and in so doing you're rounding up the big polluters that kind of club is not going to be fast-paced and ambitious so you've got a devilish problem there. I totally agree. I didn't mention climate change because it does not have that quality of urgency. It is not a black swan. It simply isn't. It's a sort of creeping situation and one in this sense I mean this may sound I hope it doesn't sound sadistic but one would hope for a crisis because a crisis would focus opinion and move the issue up on the priority list and if a plausible, this is the problem, causal argument can be made between global warming and let's say wild weather. Now wild weather would be probably one way of getting through the door of a crisis into the house that we were all in a situation of drought, flood, tsunami and might make matters in the United States I forget the percentage where it exists or they are willing to exist it exists just because there are people who are simply unaware of these connections who are sort of locked into their coming above I mean I want to get to sound patronizing here you know, have to be careful but I do genuinely believe that one reason for the toxicity of the tea the tea party is certainly is precisely because they have not been shocked into the realization that global warming is in its own way a kind of slow motion crisis now, I'm sorry I should just leave it there while I'm at it there is an interesting connection here that I can't resist you know, we've all heard the tale of the frog the frog is in the water the water is gradually heated one temperature at a time like global warming and the frog, you know, is sort of comfortable it gets a little hot, a little hotter and hotter the frog says, well, you know, it's okay no problem and the frog dies but, advantage of a crisis if you suddenly increase the temperature in the water to boil and the frog jumps out and saves its life and this metaphor is used time and time again in fact, we should have long used it in Singapore not so long ago as you would expect in this sort of, you know, thermostatic state arguing that as the temperature of the world economy goes up one notch you know, air conditioning, that was Lee Kuan Yew's right choice for the most important invention in modern times as the external heat goes up then Singapore needs to compensate by moving one degree down as it were in terms of, you know, austerity making sure that, you know, everybody realizes that discipline matters whatever it happens to be, right you know, turn your thermostats down or up, whatever it happens to be and one might argue that in the global warming case the metaphor fits perfectly the problem is that actually wouldn't you believe biologists have done the research get some water, a pot and a frog that's all you need and it's completely wrong it's totally wrong the frog is smart it gets a little too hot, that's why I like that so so that doesn't really work but you're absolutely right there has to be some way in making that message, you know incredible Thank you for the entire talk it was very interesting I have a question about the specificity of your model for democracies because, I mean, institutional complexity and institutional innovation I could see that you would have the exact same problem at the international level if the world was made of authoritarian regimes they don't need to have the same interests so I understand that, you know, the specificity what you say about the domestic level for democracies but if the world was made of authoritarian regimes you would have the exact same problem Yeah, no, I'm glad you can say that and my references again to, you know, APEC and the EIS and the G20 were precisely intended to pitch the argument at the transnational or international level I mean, it's interesting that the old debate between the North and the South globally, which I am old enough to remember, right, the new international information order and all that which seems utterly archaic and at the time at least in the North was portrayed as a desire to be at the table right, a representational question and after all, colonialism in those days was a more recent memory and so the anti-colonial drive of the South and of the non-aligned movement and et cetera, et cetera, et cetera and now it seems to me that this this prospect, this almost as a factor of the involvement of developing countries and the position of the G20 once again illustrates that Indonesia is a member of the G20, et cetera or in a different sort of way the formation of the BRICS the BRICS was a kind of amazing sort of fantasy Gemmoneal is sitting there in Goldman Sachs and his motivation is purely of all due respect, I suspect pecuniary, you know, he wants to promote these countries so that more of his clients will invest in them and so he's got nothing to do with science or anything like that and then let alone politics and then the BRICS themselves having been appreciated and put together in a single acronym actually came to meet right, and it's one of those institutional design experiments on the slopes of the mountain, on the slopes of the pyramid and so now it seems to me that the pressure as it were, there is no such thing as South, it's too diverse and non-alignment has lost all meaning basically lost all meaning in the absence of the Cold War that binary unless China and the United States recreate that binary which could eventually occur and so the issues that I was talking about are absolutely pertinent as you suggest at the international level and at that level the composition of the individual countries, the internal composition of their political formats is crucial and that's why the Beijing Consensus is so important, that's actually one reason why I mentioned it, because if the Beijing Consensus is deeply authoritarian and elitist then the shape of the world and so far as that catches on and undergirds new forms of international organization it's going to be a different world I have to say that the Chinese are so strange, the ones that I have interrupted with extremely careful not to appear to be advertising a Chinese way a Chinese model and it is I think not coincidental that the literature on the Beijing Consensus is almost entirely written by foreigners or westerners especially journalists but also some I was really interested in your talk and your ideas but I wonder what you've just said and also in your talk are you perhaps underestimating to the extent the extent to which there is still kind of social stratification within particular societies and also internationally and that that is what creates a danger for the kind of elitist institutions that you're talking about, that they may be very effective but they may also be very skewed, very easily captured by particular interests I mean the pilot in the plane everybody on board has an interest in avoiding a crash but if you think about for example the response of a government to a financial crisis for example the British government's response which has been to make austerity measures on the ground that this is necessary to resolve a crisis but those austerity measures are actually dismantling the social welfare system of the UK in a manner which serves the interests of a certain elite group how does that figure in your account I left this out because I didn't have enough time thank you for introducing that because it's absolutely great I wonder how many people in the room even know I mean we're a long way from Wall Street so why should you that there is an ongoing demonstration on Wall Street the heart of capitalism to protest inequality in the global economy now the first thing one has to say is that the demonstrators were 200 in number at the beginning and they're now down to about 50 and yet if you look at the genie index globally between countries and internally within countries with some exceptions but essentially across the board it has increased quite dramatically in terms of the concentration of wealth in the uppermost percentiles I mean in various countries it is really quite dramatic it can actually include in Australia but also the US, very much the US and as someone who is old enough to remember the M word Marxism I'm a Scottish where is class in this there are some academics who or even focus on it but as a category that has you know sort of political legs in some sense in order to mobilize people, organize coalitions and so forth it is amazingly absolute and I have real difficulty understanding this and my I guess my question would be whether insofar as this institutional form is really the leadest in the way that you're suggesting because I think obviously I think you would grant me this you're absolutely right, the pilot is a very special case that is kind of biased in favor of the elite solution because otherwise everybody is going to die right and so it's you know you're great thank you for pointing that out to the extent that this solution if I really do have in mind a distinctive institutional elevation essentially becomes an excuse for elites and to take decisions that are highly inimical with regard to the vast mass of the population and the teeny index increases I mean I don't know at some point it seems to me that there will be a massive response so the fascinating question is what is the market for you know what's the word that we use I mean Marxism or updated Marxism or a class based political activity and how will that market change depending upon what these new institutions these little pockets of autocracy and they're doing, it's going to be a fascinating story to watch and you're right and thank you for including the part that I left out Thank you very much you spoke about the Supreme Court but one of the other great institutions of American politics that's insulated from day to day politics is the Federal Reserve from the long long list of actors and institutions whose reputations look to have been tarnished by the great banking crisis the Federal Reserve would seem to be pretty high at that list the difference with the Federal Reserve though is you can't kick the buns out you don't get that cathartic moment where despite all of the failures and the suffering that's encouraged you get your one fleeting moment of pleasure where you force them out of the office and you see the looks on their faces so there's a question there about the political debate in America a narrow question about is the backlash against politics including a backlash against the insulation of the Federal Reserve from day to day politics and political oversight and there's a broader slightly glib question which is in your presentation are you in danger of forgetting Churchill's dictum that democracy is the worst possible form of decision makings apart from all of the alternatives It's easier for me to respond to your closing shot I think I'm arguing that the Churchillian definition of democracy its time has come its time has come and the conditional support or instrumental support Deng Xiaoping's style support for democracy in the United States is likely to broaden in part precisely for the reasons you've mentioned there is something we all know in political science called performance legitimacy which is not conservatory at all it's fairly instrumental and we may come out of the current global financial crisis especially if we're in for a lost decade Japan style a stagnating American economy with perhaps even double digit unemployment it's not hard to imagine a real constituency for not just changing the people who are playing the game but perhaps changing the rules of the game itself in one direction I'm not sure your comment about the Federal Reserve is extremely well taken I think Ben Bernanke in particular has been on the receiving end especially from the party as you would expect critique that would appear to almost sort of politicize the office despite the the ostensibly neutral or sequestered or isolated character of that particular pocket of autocracy but I don't see that at least without a radical remaking of the system it is possible to replace the Federal Reserve that the Federal Reserve is supposed to respond quickly and I don't know what you think of QE1 or QE2 or maybe there will be a QE3 and I find it fascinating that the debate that one would have thought might have been settled at the time of the Great Depression between Keynes and Keynes himself as you know was a monetarist and that's the source of the famous quote when he became a Keynesian and somebody asked him why did you change your mind and he said well the facts change I changed my mind and it was an utterly rhetorical question and one would have thought that that would have been settled but no, there are individuals in the United States at the moment including I watched most of the Republican candidate debates and they sort of outdo each other in an effort to come out on the side of austerity and arguably austerity is one of the things that worsened the Great Depression and so that debate is being perpetuated in the United States it's a very dispiriting time to be in America so I would not advocate abolishing the Federal Reserve I come down frankly to the Keynesian side of the environment and I think the Federal Reserve has been part of part of the Obama administration to take care of a problem that he inherited from the President and maybe I'm being too kind to the American President I'm afraid we've run out of time for just three people on this but thank you very much for the question