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LSE: Public lectures and events
LSE Summer School 2010 - Barack Obama and the End of the American Empire
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My name is Uli Seidelmaier. I teach here in International Relations department. It's a great pleasure that we got Mick Cox, who is a professor in the International Relations department that we got Mick to speak to us. Mick is an extremely busy man. He will actually have to leave immediately after the lecture. So I'm going to cut the introduction very short so we have more time for him to talk and for question and answers. Unfortunately for, unfortunately Mick doesn't need much of an introduction. Mick is, in a nutshell, one of the leading scholars on U.S. foreign policy. One of his latest works is a co edited volume on soft power and US foreign policy which came out this year. If you want to, if you get a taste after this lecture, that's probably one of the first places to look at. But otherwise I would say without much further ado, over to Mick. Mick is going to speak on President Obama and the end of the American empire.
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Thank you very much. Thanks very much. Eli. Can you please save me a drink? I'll be back on Friday. And if you want to buy the book, it is only 19 pound 99p Routledge. So if you want to make me a very rich man, buy a few copies. And welcome yet again to summer school here at the, at the lsc. I've been involved with running this particular part of summer school before and now another aspect of summer school and I think it's a great institution. It's great to have you, have you all here. Tonight I'm going to speak on Obama and the United States and maybe begin because we're now really two years more or less since he was elected in November 2008, nearly. So we've got a little bit of time to make an assessment. Equally important, it's about three years today or more or less at the moment since the start of the financial crisis in the United States and in Europe, which began in late 2007. And I'm going to try and argue that there's a connection between the two things. The election of President Obama and the, and the economic crisis. And of course it's nine years after September 11, 2001, and the attack on the Twin Towers and the Pentagon and the fourth plane which went down as we've been living through some turbulent times and in some senses I think President Obama was elected in very turbulent times. Let me just say something firstly about the election, if I could. Even now, two years on, more or less, we have to say that it was really a remarkable, a remarkable election for a variety of reasons, but maybe three, which I think must be pretty self evident to most of you, but certainly it seems pretty clear to me. I think it's remarkable. Firstly, and I think it needs to be said that before the election, when I was lecturing on who is going to win the American election, as if somehow or another I had some special insights on this, which I didn't, the question I was asked many, many times is would anybody in the United States or the majority of Americans rather elect an African American? That was a question I was asked more times than any other question before the election itself. And my answer to that then, and this is one of the very few predictions I've ever got right in my life, yes, that I thought that he would be or could be and that this, although it may present problems for certain white Americans, would not necessarily present a major problem for the majority. But nonetheless it is still a remarkable moment in American history and one I don't think we should just pass by without notes. When I travel to Europe and here, of course, I never include the United Kingdom in Europe, but whenever I travel across the channel on Eurostar and my European colleagues and friends over there say, well, Obama, you know, he's not doing too well, is he? He's failing in certain areas. I say, well, you can talk to me about that when we get a black president of France and when we see the first black Italian prime minister. So the color of his skin and the fact that he was and the background he came from, it strikes me is one of the most remarkable things about that election and one which I think is, had an enormous impact on the world. If you look at the surveys, global surveys of how much Obama is popular in certain parts of the world and he's not popular in many parts of the world, by the way, particularly in the Middle east, his ratings there are still very, very low, as is the United States. But certainly many parts of the world, the very color of his skin has made an enormous difference in a positive way, especially in Africa and not surprisingly in sub Saharan Africa, not to be underestimated or forgotten when we're thinking about the impact of an American election, which was effectively a world election. They did some surveys, by the way, in Kenya, Nigeria and Ghana, and they found that if Obama could have been multiplied into seven, he would have been elected as president in every single Sub Saharan African country. He got 95% ratings in Kenya. There you go. Well, nobody's going to get that. I think the second remarkable thing about this election, and I go back, the fact that his name was not Clinton because the fact of the matter was that, and I can remember this very well, both being in the states before the election, being over here talking to Democrats abroad and others abroad, but certainly Americans abroad, certainly within the, within the Democratic hierarchy, the kingmakers, indeed, maybe queen makers in this case. The general view was that Hillary Clinton was the obvious choice for the Democrats right through until about April and May of the spring of that of 2008, not only because of her background, because of her name, but simply because of her talents and ability. In some ways, Obama's real victory was not just over the Republicans in 2008, it was over the party machine, and it was over those within the Democratic hierarchy, the overwhelming majority who supported Senator Hillary Clinton. On the question of names, you might also say it's quite remarkable that somebody got elected in the United States with a name like Barack Hussein Obama, as many people pointed out. Why didn't he keep the name Barry? After all, that's a good Anglo Saxon name, if you like. But Barack Hussein, you know, as everybody has pointed out, this was not exactly the most obvious kind of American name. You know, I mean, you had George and George and Bill and, you know, Richard and Tom, Dick, Harry, George. Barack Hussein was really off the scale. But again, it does say something. It does tell us something. It's quite remarkable. The other remarkable and third remarkable thing about the election, I think, is let's not forget this. Only a few weeks before his election In November of 2008, the Democrats were actually trailing the Republicans. I mean, this was not just a sweep in for the Democrats. Throughout 2008, right up until, well, really right up to the beginning of September, the Republicans were in a steady 1.52% lead over the Democrats. In other words, it wasn't just that he defeated Clinton within the Democratic Party. He came from behind against the Republicans itself. I'll come back to that in a moment and explain why he came back from behind against the Republicans and indeed was in the end, ultimately very triumphal. Now, what do these three remarkable things say about the election? And I'm going to go and say other things in a moment. Well, I think it says three things. Again, I use the word three quite often. The first thing it says about him, himself and his election, not only his own character, it just tells you about the massive changes that have taken place in the United states since the 1950s and the 1960s. You might say that Barack Obama was elected in 2008 because of the Civil Rights act of the United States in 1964. The transformations that have taken place in the position of African Americans, ethnic Americans generally. It still leaves them in disadvantaged positions without any question. But that huge transition from the 60s through to 2008 really tells us something about some of the extraordinary and progressive and importantly necessary changes that have undergone in that particular country. He couldn't have been elected, I even think 20 years earlier it needed a different kind of America to the America it had been in the 50s and 60s and maybe even in the 70s and 80s. The second thing, it tells me that he was an outsider. And in some senses there is, I think, even think this very much now, that there is something of the outsider politically about President Obama. You know, not only his name, his own background, white mother, Kenyan father, Kenyan father, comes from East Africa. He comes from outside the classical black political machine which was been developed in the United states since the 50s and 60s. The National association for the Advancement of Colored People, the Urban League, these have been the classic routes for black politicians and black political empowerment. Jesse Jackson being a classic example of that. He comes from well outside of that particular mold. And in some senses there is the sense of him as partially the outsider, not the run of the mill, normal kind of politician, or indeed even African American politician. The third thing it says is something which I always bound to make a joke about because I can't avoid it, and that's Sarah Palin. I don't make jokes about G.W. bush any longer, so I just leave them to Sarah Palin. As it turned out, going back to my last that other point about the fact that a few weeks before the election, the Republicans were still ahead. The fact of the matter was that Sarah Palin, who was chosen to run with Mr. McCain, Senator McCain for the Republicans, she was not such a political turn off for millions of ordinary Americans. She may not have traveled very far. She may not have known the capital of England. She would never travel to France, of course, well known enemy of the United States. She may have only traveled as far as Canada, which is not too difficult when you live in Alaska. She may not have read too many international newspapers or indeed any newspapers at all. But nonetheless, nonetheless, she had a clear appeal. She had a clear appeal to the Republican base. She still does. She still does. And indeed it tells us something about the other side of American politics and how divided the country is. In my opinion, on the one side, there are millions and millions of ordinary, decent Americans who are clearly prepared and in the end voted in the majority for an African American whose mother was white, whose father was born in Kenya and had a name Barack Hussein Obama, but millions and millions of others who thought that Sarah Palin was really the bee's knees and represented core values which ordinary Americans would endorse and back. And indeed, after she was nominated, partner, there was, as they said, a Palin bounce. So in fact, she did not turn out to be, in political terms, at least in the short term, such a disaster for the gop, for the Republican Party. Now, given all these extraordinary things, the color of his skin, the name, the fact that he was not a Clinton, that the Democrats were so far behind, or at least a little bit behind, until a few weeks before the election was finally held in November. You have to ask the question. It's an important question, it's an historical question, but one I still think is an interesting one to try and ask and try and answer. So why did it swing towards the Democrats over those last few weeks? Why did it swing towards its outsider, an African American outsider? Now, there's several answers which have been given to this question, and political scientists have been pondering this one for quite a long time. New voters came into the system. That was critical. New voters came into the system in their hundreds of thousands, in their millions, those who had never voted before, particularly young people. But not only. It says something about the power of new technologies in American elections, too. The Obama team were brilliant at exploiting what we call now new technologies, what most of you regard as old technologies, but nonetheless, the use of technologies, the Internet, the web and all these things, to mobilize support and indeed to mobilize money. And that was another aspect. There was one thing about that election which was very, very traditional. Namely, it was an election where you had to have hundreds of thousands and millions of dollars to win it. And the remarkable thing too about Obama was this ability to mobilize really vast amounts of money for the Democrats against the Republicans. They outspent the Republicans. Another reason, of course, for the victory was Obama himself. There's no question the man has what it takes to be a world class and is a world class politician, whatever you think of what he says. You know, he not only reads books, unlike his predecessor, he also writes them. And actually the books are not bad to read. It also has to be said this was an election which was not very good for people over the age of 65. I think there's no question that McCain's age told against him. Indeed, one of the stories that often went round, which the Democrats of course, exploited enormously to say, well, poor old John McCain is a very decent human being, had a Very tough time in Vietnam. A very brave, great patriotic guy and all the rest of it. A man of great integrity and certainly not on the right wing of the Republican Party. Not at all in the Bush mode. Indeed, he distanced himself from Bush enormously throughout the campaign. The only thing they ever said to George W. Bush throughout the campaign is, please stay at home. We don't want to be seen next to you. Which actually demonstrates some of the unpopularity of Bush. He was a political liability by then, even for the Republicans. But McCain's age definitely told against him. And the story often told by the Democrats was, do you really want to vote for a party with a man aged 72, he could just keel over, you know, and whose finger would be close to the nuclear trigger. And then they saw Sarah Palin. This. I'm not sure how much this worked, but certainly the age factor played in. The age factor of McCain's age certainly played into that. And of course, there was a larger issue of the Iraq war sitting there as the kind of the mad. The mad thing in the room, the thing in the background all the time throughout that election, that kind of lurking presence, this ongoing, apparently unwinnable war, which should have been won so easily and the peace constructed so readily. Nearly four or five thousand American dead by then, a $3 trillion war, and all the rest of it, all these things played into the Democratic victory. But I think there was one big answer. Again, one doesn't want to look for single factor explanations in anything. I mean, life is far too complex for that. But I do think one thing did make the difference in the end for the Democrats, and that was the depth of the financial crisis through 2008. Bringing me on to my second point. We are living three years after the start of that financial crisis. It's now its own form of history. I suppose it began as many things begin in America and in Britain and indeed many countries in the world. It began with the housing crisis, as we know. People simply couldn't any longer pay their mortgages. Value of properties started to go down. It was quite clear that something was going very, very, very badly wrong in the housing market. And what was going wrong in the housing market, of course, was the extension of billions of dollars of loans to people who couldn't pay it back on the basis of credit that actually should never have been advanced to them and all the rest of it. And so at first, it started as a housing crisis. And I can Remember in late 2000 and several people saying, well, it's a housing crisis, but it's much more than that, as we found out through the spring of 2008, as we saw one after another of all the great Wall street houses come under stress and strain one by one. It was like a series of dominoes falling down. It is a novel and it will be made into a film. I can assure you there will be a film on this one because it is so good, it is so dramatic, it is such a fantastic story. It's much better than Avatar. One by one, each of the great financial houses, Bear Stearns, aig, Bank of America, all of them started to crumble from below. Because bit by bit, as everybody began to look into the real books as opposed to the ones they were actually telling people, they began to see that the emperor was naked, economically and financially naked and indeed owning assets which frankly, were worth nothing. We're not here talking of hundreds of millions, we're not talking even billions, but trillions of dollars of accumulated debt. Bad, bad debt. Through the summer, effectively the last 50% of the the mortgage companies in the United States, Fannie Mae and Freddie Mac, were effectively nationalized. Now, nationalization is Not American private enterprises. 100% American. Nationalizing things isn't what you do. But that's what they had to do in order simply to keep the housing market alive and well without crashing completely. But then came the real turning point, the real turning point about which a number of books have been written, the best by far, by an American financial journalist called Andrew Sorkin, who spoke here at the LSE not very long ago. He wrote a wonderful book on this called Too Big to Fail. And it's really the history of this crisis in 2008. But it brings you to that wonderful, fantastic weekend when Lehman Brothers fell or was allowed to collapse, whichever way Orr was killed or stabbed in the back, whether it died of natural causes or whether it was allowed to fail, or whether some people wanted it to fail, including others in the financial sector, we don't know. It wasn't too big to fail. It was the one that failed. It was the one they let go on. The assumption, by the way, that by letting Lehman Brothers go, you could effectively then stabilize the financial system. You had to punish somebody for all this economic failure. Moral hazard. Somebody had to pay. And it turned out to be the turn of Lehman Brothers for all sorts of interesting, intriguing and maybe deeply conspiratorial reasons. We shall find out, no doubt, one day on the Monday when it was announced here in London and announced across the water in New York, the Lehman Brothers had gone. What happened A crisis turned into a panic. A panic, and I mean a panic. It was a Cuban, what I call a Cuban missile moment. And at that point all options were off. It wasn't just that a few people were losing their houses or the mortgages were not being repaid or people returning their keys. The whole financial system of the United States, and therefore the financial system of the world, the financial system of the world was now in doubt. This was a 1929 moment. This was a really 1929 moment. It was allowed to collapse or it collapsed because of its own problems or whatever. And that famous weekend in the middle of September, a crisis turned into a panic. And within two days, and this is really quite a remarkable correlation, the votes started to look as if they were going. The opinion polls started to turning dramatically and clearly against the Republicans and towards the Democrats. It actually began in the middle of that week after Lehman Brothers collapsed because people in the United States, American voters, were in fear. Now, how bad was it? How bad was it? Well, again, listening to Andrew Sorkin speaking here only a week or two ago in another part of the summer school, the kinds of predictions that some economists, and they weren't saying this openly, of course, and writing about it in the Wall Street Journal, but they were certainly thinking it. They were beginning to predict that if things continued, if they continued uncontrolled, and that things weren't done in a dramatic way, then you could possibly foresee by the middle of 2009, an unemployment level in the United States of America of about 30%. That's what they were predicting. They were predicting a complete collapse of the financial system and with it the collapse of the whole global financial system. That was how bad and dangerous it was, not only for Americans, of course, but for the rest of the world, including Europe and indeed, by the way, including Asia. This, I think, was the tipping point for the Democrats. This was the real tipping point for the Democrats for a simple reason. It wasn't because Obama was any more economically competent than McCain or that there weren't good economists on the Republican side. After all, the chief of the Fed, Bernanke, Ben Bernanke, had been appointed in the Bush period and continued. So there was a lot of continuity in the economic administration of it all. Geithner is another figure, I mean, and others. It wasn't that. It was just that now an increasing number of majority of Americans saw the Republicans as not only having been maybe massively incompetent in terms of foreign policy, having got America into this apparently unwinnable situation in Iraq, but now economic competence had led to this disaster. And the government, as Ronald Reagan had said, as one of the foundational Republicans of the 20th century, government is the problem. Markets will always solve things. And now it was damned and obviously clear that without massive government intervention, massive government support, massive government bailouts, nationalizations, a reduction of interest rates, a massive role for the state. Now we could have moved from a 1929 Wall street crash situation towards a Great Depression. That's the point. We could have moved from a 29 financial crisis towards something like 1931 and 32. And that was the thing that had to be avoided. And we came quite close to that, by the way. We came quite close to that. And I think most Americans believed that a party such as the Republicans, who had been so much associated with free markets, the notion of market fundamentalism, that government was the problem, was not the right party to have in the White House at a moment when government was essential in order to restore some equilibrium, however limited equilibrium, to a failing market economy. The result, I think with all the other factors added, I'm not just saying it's that one factor, but I think that was the tipping point factor, which suddenly through September and into October and then into the first few days of November brought about that remarkable election. On November 4, Obama was elected with a solid majority. It wasn't a landslide by historic standards, it wasn't a kind of Franklin Delano Roosevelt landslide or one of the landslides we've seen in the post war period, but it was a big enough, it was a big enough, it was a big enough majority. And it also gave him at least near working majorities in both houses, House of Representatives in the Senate. It could well be said that the best time to lose an election is when things are really, really awful. And in some senses, when Obama assumed leadership of the United States, the tasks he were facing were really, really awful. Firstly, there was the economic crisis and its worldwide consequences of which he was very well aware. The fear that the crisis on Wall street would not only turn into a crisis on Main street, but would turn into a world economic crisis of 1930s proportions. We had also to add to that the whole legacy of nine, eleven and the so called war on terror, a phrase by the way the President has never used once since becoming President. He's called it many, many other things, but he's avoided using that term because it's toxic. He realized, as indeed did many of his advisors, that American standing in many parts of the world, not all parts of the world, not in China, not In India, but in many parts of the world, certainly in Europe, America's standing was at an all time low. If you look at some of those opinion polls in say Europe, you really, really are staggered by how low the standing not necessarily of the United States, but of President G.W. bush had come to take a country like Germany, you know, a traditionally pro inclined to be favorably disposed towards the United States for reasons to do with the Cold War and the reconstruction of Germany, West Germany after the war. The opinion polls were showing favorable disposition towards George W. Bush of a huge figure of about 17%. That is not good. Even in the country that some people call a poodle, namely the United Kingdom, the standing of George W. Bush was extraordinarily low. I won't even give you the figures for France. They were so low that they were in the minus category. It's an interesting aspect of it all however, that in some parts of the world George W. Bush was actually. And the Republicans and the was actually rather favorably looked upon, namely in China and in India. In other words, in the emerging economists, which we'll talk about a moment, the favorable disposition was actually quite high. It's quite an interesting. So we shouldn't be overly Eurocentric about that. But clearly one of the tasks which he confronted and saw as essential was to try and restore American standing not only in Europe but also more particularly in the larger wider Middle east and particularly toward what he called wider Muslim public opinion. And of course much of what he's been doing since, particularly in the Middle east, towards Israel. The speech he made in Cairo has been at least an attempt to build bridges which had been broken and destroyed in the period since 9 11. The Middle east undoubtedly was for the Republicans, as it has become now for the Democrats, the most difficult and dangerous, more dangerous and difficult than it had ever been before. The importance of the Middle east doesn't need to be underscored. It still contains 60% of the world's oil. It contains two of America's most important allies, Israel and Saudi Arabia. And of course it contains within it one, well at least a second major potential nuclear power, namely in the shape of Iran. And this again was another unresolved problem. Indeed the major winner from the Iraq war as a threat. Things have turned out as indeed here again I predicted on this platform several years ago the major winner from the Iraq war may have been the Iraqi people, but the major winner from the Iraq war has turned out to be Iran. And it's not surprisingly they are now on something of a role in the new Middle east turbulence which has been created, and of course, a series of other problems. Afghanistan, Pakistan, a nuclear state, North Korea, now already a nuclear state. And other relationships were in trouble, namely within Russia. In short, at the end of the Bush administration. I'm not laying it all down to the Bush administration policies. Many things I think the Bush administration did were necessary and some of them I think were actually right. But overall, overall, there's no question. In that eight year double term of G.W. bush, the position of the United States, instead of getting stronger, had become weaker. Its standing in the world had been reduced. Anti Americanism had become embedded in much of the discourse of European intellectuals and others. And in many parts of the world, at least outside Asia, the United States was regarded as more of a problem than it was a solution. That's the simple reality, it seems to me, and that is what Obama has set out to try and address, successfully or otherwise. But there was, and this is really the theme of what I want to try and drive at in the rest of the talk here. It seems to me there was a much larger challenge and that's what I really want to focus on. These are the specific issues I've talked about and we can pick up some of those in the Q and A, which I'm more prepared, more than happy to do. But it seemed to me, looking back, and perhaps a lecture like this is much better if I stand back a bit and maybe make, take a much, take a wider view of this, look at a bigger canvas. It seemed to me that, and I think it seemed to many other people, there was a much larger, bigger, wider challenge facing the United States other than all these specific, specific problems of which I have already mentioned. And this much larger challenge could be summed up very simply that there appeared to be to many commentators, many analysts, that the balance of power in the world more generally looked like it was shifting in ways that were unfavorable to the United States particularly, and to the west more generally. In other words, it wasn't just short term economic problems or short term issues to do with the Iraq war or the fact that George W. Bush's policies had alienated so many people both in his own country and in Europe and in many other parts of the world, including the Middle East. It wasn't just to do with Pakistan and North Korean nuclear weapons or the problems of the Middle east. And all the rest of it wasn't just to do with trade problems and all that, or terrorism. There was something much larger going on in the background, if you like. There was a much larger problem, a much larger challenge. What we call in international relations a power transition. And let me say something about that and how dominant this view was becoming. By 2008 and 2009, I first detected this kind of debate about power transition from west to east, from the United States to ultimately to China. You can first begin to see this debate emerging both over here and in many other parts of the world. In the early parts of the Bush administration in Foreign affairs, one of the major American journals, of course, on International Relations in 2004, the editor James Hoag wrote the following. And from the West's point of view, rather worryingly, he talked of a global power shift in the making. He wasn't interested in what was going on in Iraq, he wasn't particularly interested in war on terror or Iran and all the other particular things. He said there's a larger global power shift in the making which if not handled properly by the west could very easily lead to major conflict. In other words, it wasn't just the specifics. It was this larger transition that was taking place in global international geopolitics four years on 2008 and in the wake of the Wall street crash and of course that impacts on perceptions of the west in America. A China expert who worked for a period here and has written a great book on this, on China, Martin Jakes, he repeated a similar point, but in an even more dramatic fashion. America, he said, was now self evidently in decline, self evidently in decline. Economically, China was most obviously rising and because of the 2008 financial crisis, the liberal economic ship was sinking fast. There was only one conclusion to be drawn. According to Martin Jakes, the biggest geopolitical shift. Here you go. Since the dawn of the industrial era was underway. One that would have us all swatting up on our Mandarin. In a world where the west would now be learning its economic lessons from the Chinese rather than the other way around. This is pretty dramatic stuff. That's pretty dramatic. Nor did predictions of a less than sanguine future for the west end there. I'll bring in Goldman Sachs. Goldman Sachs not only seemed to agree with Martin Jacques, but supported his thesis with possibly the most cited table of the last few years. These are the famous Goldman Sachs predictions of the shift in global economic power which they published in 2007. And the title of this the Predicted Shift in the Economic Balance of Power. Not exactly likely to. Not exactly a page turner. But in this, in this particular two tables they put forward, it had an enormous impact on people's perceptions and understandings. Of, of where the world is and where the world is going and where the world will be over the next 20 or 30 years. And this made what looked like an ironclad statistical case for a massive power transition. In 2015, it posited the American economy was still, and would be still significantly larger than China's. That's fine, aha. But gaze over the horizon, look forward a few years. What happens by 2050, however, possibly much earlier it would be at least the American economy would now be 10% smaller. In other words, by the year 2030, 40, 50. Not exactly sure, but certainly by 2050, the Chinese economy would have become bigger, presumably more productive and indeed more important than that of the United States. Not only that, argued Goldman Sachs, for other rising economy. India, Brazil, Japan, Russia, when taken together with China, would by the middle of the 21st century be out producing and presumably outplaying the West. A new age, in other words, was in the making. Now you might say, well, Goldman Sachs. Well, they would say that, wouldn't they? Because most of their investments are in China. Martin Jakes would say that about China after he's just written a big book about China with the title When China Rules the World. Sounds like a musical. But no, no, this view has been repeated nearly every day, every week and every month over the last few years. Famous British historian of empire, of financial historian Neil Ferguson, who he's now been converted to this notion of Western and American decline. Now I should say something about Neil Ferguson. Back in 2002, 2003, Neil Ferguson was talking of a new American empire in the making. The only problem was the Americans didn't know they had an empire and he needed a Brit, or more particularly a Scott, to remind them they really were an empire and start behaving like the British, namely imperially, strange hats on and wearing strange socks and things like this. So Neil exactly was, in a sense, you might call him, an intellectual neocon. Certainly not somebody known for his anti Americanism and certainly not somebody known for his hostility to the West. But only this year or towards the end of last year, he wrote in the Financial Times and he's repeated the point elsewhere. The world is changing dramatically. We must now wake up, he says, to something fundamental. Washington is no longer the new Rome, America is no longer the great empire. It is now going the way of the Roman Empire, namely downwards. And that sooner or later the west will have to get used to a world where most of the key decisions will be taken elsewhere. We are, in other words, according to Ferguson, at one of those Great turning points in world history. And there's little, it seems, that any of us in the west can do about it. Now, if we take all these things together, the quotation from 2004, the Martin Jakes quote of 2008, what Goldman Sachs says 2007, and what Ferguson said at the end of 2009, I think this is the real background. This is the real issue. This is the really big question that we have to think about when thinking about the role of the United States. Not just particulars of this policy in that country or who says what to whom, or whether Hillary had a good time in Pakistan when she was there. She didn't, by the way, you know, or whether or not Obama likes to come to Europe very often. It doesn't seem so at the moment. It's nothing to do with that. It seems to me this is the larger question which really confronts this administration and indeed confronts. Confronts the United States more generally and indeed from that point of view, bringing in our own backyard, if you like, also confronts the Europeans, confronts the Europeans as part of the West. So what we're facing, according to this particular analysis, therefore isn't just a series of particular problems. It is a much larger power transition. Now, the thing about a power transition, without getting overly theoretical about it, is of course, that power transitions in the past have always made the world more dangerous. They've always made the world more unstable. When you get rising powers and declining powers, that is the moment of greatest difficulty and danger in international relations. You could say it has been power transitions which have been the fundamental cause of great wars over the last 200 years, of great power wars, not civil wars, not small scale wars within states. It's been the fundamental essential cause, if you want to use that kind of terminology, of the great wars of the late 18th and early 19th century and the Great War and more obviously of the 20th century, the first and the second, and even the Cold War could be interpreted as many have done, as wars or conflicts created by power transitions, powers either falling or powers attempting to rise in ways which then disturb the status quo and bring the status quo into question, and by bringing the status quo into questions, therefore leads to greater power conflict. It is also highly problematic, not only globally, but obviously it's a major problem if this is true for the United States, because what this argument is suggesting, indeed not just suggesting, making absolutely abundantly clear, is that the American age is over, the American era is over. If the 19th century was European, if the 20th century was American, then the 21st century is going to be Chinese or Asian. That's what is being said here. If this is true, then of course the implications are just staggering for the United States because it would mean the power which has been at the dominant, has been the dominant power for over 50 to 60 years, has been number one, has been preponderant, has shaped and defined international relations in ways you might or might not like, but has done that. It means that it is no longer the shaper of the future of the international order. It also means more generally that the Western agenda, what we've known as the west, that its agenda is no longer the only one or the dominant one. So it is not just a challenge to American primacy if we take this argument seriously, and indeed many people do, it is also a challenge to what we call the West. Now, what do we say about this particular argument? And indeed can Obama do anything about this? This is a kind of much larger question because the particular issues about particular countries he might be able to do something about. But can he do very much about something which is deep and structural and almost, you might say, even outside his control? Well, it seems to me firstly that three things are self evidently true for the Obama administration and indeed for the United States. And the first is pretty obvious, is the west, including the European Union and the United States are in economic trouble. I mean, we are not out of the woods yet. To read some economists, none at the lse, I point out straight away to read some economists when people say the crisis is over, things are getting better. It's all right now, Jack, don't worry. I don't think serious economists believe this. The west, the eu, the United States are still in economic trouble. If you travel to Europe, mainland Europe, you come to this country, go to the United States. All the indications are a deep pessimism about the economic future in the United States. I just looked at some opinion polls. Only 24% of Americans are optimistic about the economic future in every single European country, except by the way, for Germany. Predictions and anticipations of the future are still deeply pessimistic. Just come back from Spain. Unemployment there is about 22%. Italy, Portugal, a number of other countries. One European country has actually collapsed. Iceland, of course, and Ireland is going through so many problems. So there's no doubt that underlying all this is a deep sense of economic malaise in the West. There's no doubt about that. The second point, which is self evidently true and indeed you don't have to be an economist to know this. You only have to travel to Beijing or Shanghai or to any of the countries in Asia, is that China and others do have far more economic clout in the world. There's no doubt about that. The position of China and the world, I mean, we see the statistics every day, growth rates of 10% per annum. I mean, the EU may not grow for 10% over the next five years. The Chinese are doing it in one year. China now consumes more oil from Saudi Arabia than does the United States. It is now the biggest energy consumer in the world. There's an extraordinary economic revolution that's taking place in China and other parts of Asia and India in particular, but China in particular, which is clearly transforming the shape of the economic order and overwhelmingly, it seems to me, for the good, whatever the problems that it's going to involve over the longer term. And I think thirdly that the Obama administration, and bringing it back to the Obama administration quickly, has recognized clearly and openly that Asia, China, Asia generally, China particularly, needs to be given more attention. And this has been reflected in his speeches, in his utterances, and indeed even in his travel plans. Some have even argued that he is the first US president who has preferred to go that way across the Pacific rather than this way across the Atlantic towards Europe. Indeed. You know, just on the kind of picking up tittle tattle. I love tittle tattle, so if you've got any, please send some to me. I love gossip, but there's a kind of an underlying assignment. I picked this up from a lot of my American friends and not just my American friends. I do have others. It's kind of Asia is sexy. China's interesting. Europe is a bit dull. It's a bit boring over there. It's not doing very much. It's Asia and China where things are really happening. I always used my test of going through an airport and going to the bookshop. What is selling on bookshop lists in airports? Well, it isn't the future of the eu, it isn't the Euro. An analysis. Where is Europe going? No, it is rising China Dynamic Asia. Why Asia will take over the world, why China will lead the world. This is, in a sense, where it's at. This is where the debate is at. And indeed, it almost appears, at least in a superficial sense, that the United States, in a sense, has got, if not bored and entirely, entirely bored with Europe. After all, we still have the best coffee in the world and our wine is better, except for Californians. It's a sort of sense that somehow or another the tilt is occurring not only towards Asia and towards China, but American Policy itself is tilting towards Asia and towards China. And that's the other point about this administration that many people have really hooked onto. There was this really quite interesting little thing this year. President Obama was going to come to have attended a summit, I think an EU summit, wasn't it, in Spain? And he cancelled. He cancelled coming here. And all the Europeans thought this again, he just really wants to get back over there to Beijing or Shanghai or Tokyo or Seoul or wherever, anything but coming to Europe. And Europeans took this again as a signal that somehow or another Europe was going down while Asia was going up. The EU was declining in interest and importance. Asia, China and others, the east were going up. And of course, this has had a particular resonance in Britain, where the British are constantly worried whether their relationship with the United States is special or not special or not quite so special as it used to be. It used to be special, but it isn't special any longer. You know, and, you know, President Obama has taken the statue which he had of Winston Churchill out of the White House office pretty reasonably. After all, Winston Churchill was involved in suppressing the Kenyan national liberation movement, which his father was part of. I don't. If my father had been part of the Kenyan national liberation movement, I would have Churchill out of my office very quickly. And by the way, guess who he replaced him with? Abraham Lincoln. Well, if I'm Barack Obama, that seems a pretty damn good substitute for me. But again, you know, there's part of this sense that somehow or another over here, Europe, uk, wherever, we are, simply no longer important or much less important than we once used to be. So it's not just a tilt from the west to the east, from the USA to China. It is the United States itself is making that adjustment very, very rapidly in terms of its own orientation. Now, what I suppose I want to argue very briefly over the last few minutes is to say I think we just need to be a bit careful with that kind of analysis. That's, I suppose, really the point I want to put forward. Not because I want to defend the west forever or because I want to keep China down, or I don't recognize the great importance of a change in international relations, but because largely, I think we need still to keep, in a sense, our feet on the ground when thinking of great geopolitical shifts, that's all. Is the west down and out? Is the EU and North America really becoming, you know, the kind of sick man of the world, the kind of Ottoman Empire which collapsed in 1980? Not quite yet. In crude economic terms, the EU and North America together still make up half the world's economy needs to be reminded. The US economy, however many problems it may have, is still nearly twice as big as China's today. Whatever the future projections are, it's a highly dynamic economy as well and a highly innovative economy. And never underestimate that if we look at foreign direct investment still, if we look at the boring statistics, which unfortunately, Goldman Sachs did not, the foreign direct investment still flows in much greater amounts across the Atlantic than across the Pacific. I know this comes as a great surprise to anybody to say that, but that is the crude and simple economic reality. There's, of course, an enormous and growing amount of Trans Pacific relations, but still the greatest amount of FDI flows are across the Atlantic and not across the Pacific. Many of the great global financial institutions of the world are still to be found in very large numbers in the Atlantic economic region. I've always said, too, that there's a very interesting indication of economic power. The very fact that the financial crisis began in America and then had global consequences. That tells you how essential still the United States is to the world financial and economic system. If that financial crisis had begun anywhere else, it wouldn't have had anywhere close to the consequences that it ultimately did have for negative reasons. I know, but again, it tells us something about the science. I won't even begin to mention the dollar. It is still the most important universal currency in the world today. The second question I want to pose, and it's again, it's a series of questions, and I don't come up with any definitive answers. These are simply challenges to what I call a lazy kind of way of thinking about international relations at the moment. I suppose that's the best I can do. I'm not sure I understand what the east is. I suppose. I think I know what the west is, more or less. More or less. I think we know what the west is, not where it is, but what it is. But what is the East? That's an interesting question. Geographically, it's easy enough. It's east, so to speak. But I think analysts mean something more. They mean more or less a well defined political and economic entity. But does such a thing, which is a defined political and economic entity called the east, actually exist? It's not so clear. Where do we put Japan? It's the most secure ally the United States has got. It is one of the closest special relationships the United States has got. Geographically, of course, it's located in the Pacific. But clearly its economic and certainly its political and security relations, particularly Political insecurity are entirely integrated into an American led security order across the Pacific. South Korea, the same. Where does India, where does India see itself in terms of this? Clearly geographically part of South Asia, but politically and economically and increasingly strategically, it sees its major positive relationships. With whom? With the United States of America, as we've seen in terms of the recent strategic nuclear deal and this equally true, and if not even more true, of an important economy, although not an independent country formally, such as Taiwan. Four enormously important economic players, especially Japan. We talk very much about the rise of China and we talk very much about Japan's economic problems. We still forget that Japan is still and will remain for some time to come the second largest economy in the world. And it is in some ideological and political sense, geographically part of these. Politically and ideologically and economically, I'm not so sure. Thirdly, hard power, military power, if you like. Now, power is not so simple to define. It takes many forms. The fact of the matter is, if we look at those crude, hard statistics, who has it, who's got it, who spends it? Where is the global military balance of power? At the moment it's only in one place and it's called the United States of America. They spend nearly half of the world's expenditures on national security today. In terms of R and D, they spend more than three or four times more than China. Indeed, their military budget today is actually 14 times bigger than that of China. And indeed the third and fourth most important military players in the world today, guess who they are, France and the United Kingdom in terms of military expenditures. So in terms of hard power and global reach, it still seems to me not proven that if we're talking of a power shift, how can you have a power shift when still the dominant military act and global act, indeed the only serious global player in that state sense, it still remains the United States. Fourthly, quickly, has American foreign policy tilted entirely or mainly away from the Atlantic towards the Pacific? Again, I think one's got to be very, very careful on this. You've got to be very careful on this one. There is no doubt that in the economic situation the United States finds itself in, it wants to find major economic allies who are growing. And China is growing, Asia is developing, India is growing by 9% a year. It wants that economically dynamic partnership with those countries and quite rightly too. But does that mean it's tilting away from Europe? I don't think so. I really don't think so. I think again, this notion that American policy is moving away from one part of the world to the other is simply a fiction. It's simply a fiction. The most important alliance of the United States today still remains NATO, a European based alliance. In Europe it has long established allies. Europeans and Americans may tell bad jokes about each other, very bad jokes about each other. I'll tell you some later. But there's still an assumption of trust between the Europeans and the Americans. It's come out of 40 years of cooperation and working together and being democracies. It does make a difference. Even the special relationship about, about which the British constantly are worried may not be quite so dead as some insist. And finally, I get onto the point of leadership and it brings me back to Obama and the end of my lecture. I thought about, I've written about, I've contested about the United States now for the better part of 25 or 30 years. It annoys me, it excites me, it invites me. Occasionally I invite Americans back here. I thought long and long and hard about this, but it gets back to one of the fundamental questions of international relations. In a way. It's a question about leadership, essentially. I suppose, going back to what I was saying. Who else will do it? Who else wants to take it on? Last two years is much to discuss about how well Obama has done, that's for sure. How well has he built bridges to the Muslim world? Has he reset the button with the Russians? All the rest of it. How well has he led the west out of the economic crisis? Should he have given more support to the Iranian opposition last year? And all those sorts of questions. Should he be as critical of Israel as many people think he is? All the rest of it. But think about this for a minute. It is Obama we asked to do these things. That's the point. That's the real point, it seems to me. We don't think that President Hu Jintao will do it, with all due respect. We don't think that President Barroso of the European Union will do it. We don't think our wonderful David Cameron will do it. We don't think Sarkozy will do it, although maybe his wife might. I've been waiting for that joke. Angela Merkel may be a very fine woman. She won't do it. The point is we actually still, if we're absolutely honest about it, still think that that leadership will, has to, must of necessity. And who else is going to do it other than the United States? And that is why we have such interest in the United States and why we continue to have such interest in Obama. It isn't Just that it was an extraordinary election in 2008. It isn't just that in some ways he's an extraordinary man, although he doesn't walk on water and he can't perform miracles as we are discovering. Although some have been disappointed by that fact, it is that we still look over there. Others may veto American actions, others may limit American leadership, but it is only the United States, it seems to me, better or worse, which will remain the leader of the strange and problematic world that we live in. And it seems to me that may be the most important indication that if the world is changing, and I think in many ways it is, in some fundamental ways it is not. Thank you very much indeed.
- [58:11]
A
Okay, as I mentioned, Mick will have has a train to catch, so we have to move on very fast. We have a little bit of time for questions. I would suggest that we maybe collect some. Is that going to be able possible for you to run around with your microphone and if you can self select yourself in such a way that those who can ask a question ideally in one sentence.
- [58:36]
B
Yeah, it's not here. Hi. Is there a correlation between Obama's proposed use of smart power and American declinism in your opinion? America's. What defines declinism?
- [58:50]
A
Okay, let's have more. And that's a perfect example of how brief a question can be. Yeah, Mr. President, Obama here.
- [58:59]
B
Where are you? Oh, sorry.
- [59:02]
A
Obama got the Nobel Peace Prize in.
- [59:04]
B
Maybe two or three months in his office.
- [59:08]
A
Was it legitimate enough? Let's have one more question. Maybe if we just take you right there. The microphone is behind you.
- [59:18]
B
Professor, thank you for lecture. You said When China Ruled the World, why is it a musical? Why is it. Why is it a musical? Musical. Oh, I see. Another question. What kind of music? What kind of musical will it be? Okay, very good, very good.
- [59:44]
A
Okay, thanks. Let's give them, Mick, a chance to answer.
- [59:48]
B
Do you want me to answer the last question or sing it? Yeah, it's. Sorry, it was one of my very bad jokes. No, the English are not very good at many things, but one thing they do, I suppose quite well is make jokes largely about themselves. Well, they think they're very funny anyway. No, I mean the book written by Martin Jakes, whom I quoted, I mean, is actually called When China Rules the World. And I said to Martin one day, when will it be made into a musical? And he wasn't amused. But I'm glad that you were. But anyway, I don't quite know what sort of musical it would be. However, on that issue of musicals, one shouldn't be maybe not so dismissive of that argument. By the way, many of you probably will not even remember Richard Nixon, Tricky Dicky, but you certainly remember Watergate and all the rest of it. And I have a great admiration for Richard Nixon for two reasons. He had an affair with Zaza Gabor, which I never knew about until yesterday, but I read about it. And secondly, he redefined international relations in a dramatic way by making the opening to China. In some senses, it was Nixon's turn to China, in a sense, pulling China back even when Chairman Mao was still alive, which was an extraordinary dramatic transformation in international relations. And in some ways, we are living still within the framework of that change of dramatic relationship between China and the United States. And by the way, guess what? They made a musical about an opera, Nixon Goes to China. So, you know, musicals have been made about this issue. So if you ever get. It's a terrible, it's a terrible opera, by the way. But there you go on the Peace Prize. Look, I suffered from Obama mania because I was so pleased not to have I'll be honest with you, you may have gathered already. I was so pleased not to have the Republicans and Sarah Palin in the white. And to be perfectly honest, after eight years of George W. Bush, I just about had enough. And I was an extraordinary great admirer and still am, by the way, of a great admirer of Barack Obama. I do think, joking aside, I think he's a remarkable world class politician. And my view is it's good for America and it's good for the world to have a person of that quality running the most important economy and the country that spends more on defense and national security than the rest of the world put together. I don't feel entirely secure about the world, but I feel a little bit safer and I certainly feel a bit more secure to have a person of such intelligence and it seems integrity running it. So when the Peace Prize was announced by the Nobel Peace Prize Committee, all my friends said, this is ridiculous. He hasn't done anything yet. He's hardly got out of bed. And there he is by February being nominated for the Peace Prize. So in typical liberal kind of left ish, kind of lse way, I kind of said, oh, stop complaining about Barack Obama. You know, stop, man. But in some ways, I think what he probably should have done, and I didn't say this at the time, but now I'll admit it in public, I was a little bit wrong on that one. I mean, clearly, I think the best thing he should have done is Said, it's a wonderful thing. I think Norway's a wonderful country. Can we have your oil? But I think he should have said, look, it's too soon to tell. I think that's what he really should have done. However, I think what the Norwegian Nobel Prize Peace Committee were trying to do was send a message. I think that was quite important. I think they were trying to. I actually happen to know not the people on the committee. I do know one or two people on the committee because I've worked in the, in the Nobel Institute over the last few years a couple of times, and I think they were trying to send a message. I think in the end, however, it had been. I think it would have been a classier move by a very classy guy to have said, it's a very fine gesture, but I think maybe let's wait and see. Because there's so many unmade peace situations. The Middle East, Palestinians, Israel, Iran, a whole series of other issues. You want to judge people not by the prizes they get or the words they utter, however brilliant his words are, but by the actions judged by your actions and not just by the words. So I take that point. On the issue of smart power. Well, I've written about this. I won't go into too much detail about it. I mean, the idea of smart power is to combine both hard and soft power together. I think it's again, one of these kind of clever concepts, smart power. It does have some validity and it's actually a way of trying to restore American standing, to show that America can not only use hard power, military power, but can use diplomacy, engagement, and indeed even the image of Obama is in a sense a form of soft power. A powerful form of soft power. And I think they're trying to say that this is it. On the other hand, I do think there's something kind of overly smart about smart power. I think it's a very clever move, however, by the Democrats, because if you say we're smart, does that not imply that previous guys were dumb? You know, and I think it's there. It has more political uses and I think in the end it's going to have foreign policy consequences. Take another round.
- [64:57]
A
Okay, we have one here in the front.
- [65:08]
B
In Europe we have now anti discrimination law which concerns race and which concerns gender. And what do you think what is more a disadvantage being a woman. Woman are being of black color. And you're asking one middle class man. Well, because I, I think Hillary Clinton. No, I, I think you ask a very. All right, I'm Getting very excited because I think Hillary Clinton would also do a good job with. No doubt about that. No doubt about that. No doubt about that. From Ireland, originally from China. Thank you very much for the fantastic speech. I have got some very simple question. Just wondering where is eu? If, I mean if we assume that will be a power transaction from yes. US to China. Thank you. Yeah, good question.
- [66:14]
A
Take one from up there.
- [66:14]
B
Yeah, over here, over there. You've got to ask the man with the left hand going up, otherwise you'll be called discriminating against right, left handed people. I'm from Beijing, People's Republic of China. I'm quite interested in a point you made that in history, the transition, the power transition associated with wars, but actually in the ongoing transition from power transition from west tourist has been taking place in many years, but in the past few years there are no signs that either side, US and China has intention to engage in any kind of wars and clashes. But do you think in the future like the western East, US and China has any possibility to have any kind of wars and clash and conflict, any levels? Thank you very much. Well, let me answer the first question. White middle class male tries to answer this question. In the end, I think I don't dismiss Hillary Clinton's abilities, by the way, by stating what I think are the positive sides of Obama. That's not to say anything problematic about Hillary Clinton's capacities. I mean, she's an extraordinarily able person and as she's proved as Secretary of State of the United States of America, you know, a fine and articulate person who represents, you know, not only herself but also her, you know, her nation extraordinarily well. People who work with her, you know, talk about her dedication, her energy, her vision. And she's also, by the way, coming back to smart power, elected some very smart people around her. So no criticism implied. The two things I would say, however, one, in the end she was too much identified with the party machine and I think that was a disadvantage for her, not just being a woman, but maybe having the husband she did was a bit of a problem. Bill Clinton seems to me was one of the great, actually a great politician. He may not have the best morals at times, but he was a great politician. And actually like many great American presidents, has turned out to be a great ex American president as well. Jimmy Carter was one of the worst American presidents but has turned out to be one of the great presidents after he was president. And Clinton is doing the same. He's making terrific interventions on all sorts of major issues, hiv, aids, global warming, all sorts of other things. But you do raise a big question, it seems to me. Would it have been more difficult for a woman to have been elected president? I think that's the point you were trying to drive at. Than it would be for an African American. Do you know? I actually don't know the answer to that question, but I suspect it would have been more difficult for a woman. Yeah, I think in some ways I think it would have been more difficult for a woman than it was for an African American. Perhaps in the end, if we get an African American woman, that would be the most wonderful combination. But it still tells us. It still tells us some pretty positive things about things about America. That's all I'm. That's the thing I always say. That's the thing I always say, whatever criticism you might have about America, it does still tell us that an African American can be elected in the biggest democracy in the world in an election which nearly 60% of the people voted. That's not to be sneezed at. On the question of the eu, Great question. That's a very, very long answer. The big, big danger for the EU is I think Yuli knows much more about this than I do. The EU has still got massive economic power. It has enormous soft power and enormous normative power in the world. Its impact on the world is much greater than simply having F111s and all the rest of it. It doesn't have hard power in any real sense. It does, however, have masses of other power. Never underestimate what the European Union has achieved not only over the last 20 years, but what the European project has achieved for Europe since the end of World War II. It is one of the great fantastic success stories of international relations. And I'm a total and utter convinced European on this. And since the end of the Cold War, take away the European Community, which becomes the European Union, you end up with a much nastier environment in Europe if you don't have the European Union. And the European project from that point of view has been a huge success. I know there's all sorts of difficulties. Yuri knows many more things about this. However, having said all that, I do think there is a problem in the end. And I'm still quite optimistic about the European Union, even though some Europeans aren't. There is a very real danger being squeezed between a still very powerful America and an emerging Asia and an emerging China and finding a role which between those, in a sense, the two kind of emerging great powers. If you Want is going to be the greatest challenge for the European Union. And I don't think we should underestimate that. My friends and colleagues in the Commission and the Parliament don't underestimate that. They talk about that and they reflect upon that very, very, very, very much so. But there is that. There is that. There is that issue on the last question. It'll have to be the last question, otherwise I won't get to Brussels tonight. Look, I think. I mean, again, I mean, there's many things about China I can be critical of. You don't need to hear all that. I mean, they're pretty obvious things we can be critical of. Nonetheless, I think the emergence of China has been one of the great positives of the last 20 years in international relations for the world economy. Thank God for the Chinese economy. I think we should say, after all, they're buying up most of that terrible American debt. Not quite sure I'd be giving all my dollars over to the United States to buy treasury bonds. The Chinese economy has made enormous strides. It has done more for poverty reduction than any other country in the world. You know, if you want to measure poverty reduction, if you're interested in those sorts of things, which you should be, China has made the biggest contribution to poverty reduction, more than any Western aid, more than anything the EU more than anything the Americans have done in terms of aid. Chinese economic development has got millions and millions of people out of poverty, but particularly in China, where there was so much. And for that we should say thank goodness. And I think, finally I'd say Chinese foreign policy. And this is where I'm more optimistic, at least in the short and medium term, and maybe over the long term, too. I mean, China has. Knows quite well its leadership is intelligent and understands international relations a lot better than some IR scholars, I would say. And they've understood very well that China has to emerge in a way that doesn't make other people feel threatened. It has to emerge in ways that integrate it into the system and not challenge the system. It has to emerge in ways that adds to the sum total of prosperity, both in the region and across the Pacific. And the peaceful rise theory is one which seems to me adapts very well to this now. So in the very medium and short term, maybe the next 10, 15 years, we can't envisage major conflicts between China and the United States. And certainly the Americans are not planning for that. They're simply not planning for that. Will there, however, be difficulties? Of course there will be. Of course there will be. I mean, you could see any one number of difficulties that are going to emerge between the prc, between the People's Republic and the United States of America. You can see it over Taiwan. I mean, this is going to be an issue, it always will be an issue in complicating the relationship, because Taiwan, formally speaking, is part of China, and the United States recognizes that, but still gives security guarantees to Taiwan. I have no doubt either the issue of Tibet is going to come up again as a political problem. I don't think it's entirely stabilized, as far as I understand. I mean, I talk to people, Tibetans and others. This will come up again. There's going to be major trade issues. You know, is the Chinese government playing with the exchange rate, you know, selling cheap. All these things will come up as problems. But this is in the nature of normal international relations. Does this lead anything close to a great power conflict, as it has done in the past when we've seen in Europe and Japan where we saw great power? I don't think so. I still remain resolutely optimistic about that relationship. There will be problems, certainly in the short and medium term. Over the long term, however, we should, and we must all remain optimist. Thank you very much indeed.