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TEDGlobal: Joseph Nye on smart power

Bruno Giussani, our host, tells us that good news appears to be an endangered species. But there are reasons for reasonable, rational optimism. There’s new science, new art, new ways to collaborate, and lots of reasons to hope for the future. “The Good News” is the theme for the 2010 gathering in Oxford, hosted in the Oxford Playhouse, continuing from today through Friday.

Professor Joseph Nye is one of the world’s most influential political theorists, responsible for much of the thinking in the US about soft power. It’s hard to think of someone better qualified to lead the session, “The Global Century”.

Nye tells us that power is changing in the 21st century. We’re seeing a power transition – a change of power among states – moving from west to east. And we’re seeing power diffusion – from all states, west or east, to non-state actors.

This isn’t about the rise of Asia – it’s about the recovery of Asia. In 1800, more than half the world lived in Asia and made more than half of the world’s products. In 1900, Asia still had a dominant population, but no longer made more than a fifth of the world’s goods. This was the result of industrialization, which vaulted the US and UK into new positions of power. That’s changing, rapidly.

The diffusion of power has to do with communications technology. If the price of automobiles declined as rapidly as computer technology has, we’d be able to buy $5 calls, Nye tells us.
Historically, you could communicate globally, but it was very expensive, so you needed to be a government or the Catholic church. Now you just need to walk into an internet cafe.

The state still matters, but the stage is more crowded – there are many actors. We’re happy about some of these non-governmental actors – Oxfam – and not others – Al Qaeda.

What’s power? It’s the ability to get what you want. You can assert power through coercion, through payment and by shaping what others want. This third way is called “soft power” and Nye worries that it is much neglected and misunderstood. “If you learn to use soft power, you can save a lot on carrots and sticks.” In previous days, a great power was a country able to prevail in war. But it’s no longer just about whose army wins – it’s about whose story wins.

People have been saying that our current financial crisis is the beginning of the end of American power – indeed, Dmitri Medvedev announced this “fact”. But every 10 to 15 years, people declare a forthcoming American decline: in the wake of the launch of Sputnik, the 1970s oil embargo, the transition from rust belt to Silicon valley in the 1980s.

Goldman Sachs projects that the Chinese economy will surpass the US economy in 2027. Nye warns us to be careful about these projections. China may pass the US… but that will be in total income, not in per capita income. And the Chinese won’t pass the US until well after 2050. And these projections are one-dimensional – they don’t look at military power or soft power. He also reminds us that Asia isn’t one place – China rising could be a threat to India, Indonesia and others, who want the US as a safeguard against expansion of Chinese power.

Our beliefs about the power of the US and China are important – the biggest challenge we have in shifts of power is fear. We don’t need to fear the rise of China or the return of Asia. If we see this in larger historical terms, we’ll be able to manage this process.

If you ask how power is distributed in the world today, it looks like a 3D chess game. Military power is the top board, and the US is the only superpower. The middle board is about economic power, and it’s deeply multipolar. The US, EU, China and Japan all balance one another. The lower board is transnational power – financial flows, drug trade, pandemics – all the things that transit across borders without government control. There are no powers in this space – which means the only solution is cooperation. In this last sphere, soft power is what’s most important.

Questions like carbon trading and global warming aren’t zero sum games. Unlike military conflict, it’s not about I win, you lose – it’s possible in these spheres for everyone to win.

We need to mix hard power and soft power into smart power, a hybrid strategy that focuses on providing global public goods, things from which we all benefit. Here we can learn from Britain in the 20th century – a commitment to open trade, global currencies were good for the UK… but they were good for the wider world as well.

Hillary Clinton said that the foreign policy of the Obama administration would be smart power – using all the tools available in the toolbox. If we want to do this, we need a new narrative that combines traditional power and soft power into smart power. The good news – we can do this.