The Future of Power

An address given to the Los Angeles World Affairs Council

On March 28, 2011 by

Dr. Joseph Nye

Distinguished Professor of Government at Harvard; Co-founder of the
International Relations Theory of Neoliberalism and Originator of the
concept of soft power; author of The Future of Power

Thank you very much for that generous introduction. Its a great pleasure to
be back in Los Angeles and with the World Affairs Council. I am always
reminded, when I hear a generous introduction which refers to me as Doctor
Nye, that when my three sons were growing up, and people would call the
house and theyd say, Is Dr. Nye there? Theyd say, Yes, but hes not the
useful kind.
What Id like to do tonight is talk to you a little bit about The Future of
Power, the title of this new book, how that reflects on what will happen in the
United States in the next couple of decades, and where we fit in the world. If
we think about power, power is simply the ability to affect others to get what
you want, and you can do that in three ways: You can do it with threats of
coercion; sticks. You can do it with payments; carrots. Or you can do it with
attracting others and persuading them to want what you want; thats what I
call soft power. And if you can generate enough soft power, you can
economize on sticks and carrots.
The ability to use both soft and hard power is what I call smart power,
which is a term that Hillary Clinton has picked up, and said is the theme for
the Obama administration. But we are not doing as well on smart power as

we should be, and that will be sort of the moral of the story that I am about
to tell you.
There are really two big shifts that are going on globally in terms of power in
the world in the 21st century. One is what I call power transition, which is a
shift of power among states. In this case I think its largely from West to
East. The other is power diffusion, which is the movement of power away
from states or governments to non-governmental actors.
Now, power transition the shift among states is sometimes called The
Rise of Asia. But it should really be called, The Recovery of Asia. If you
took a snapshot of the world in 1800, you would see that more than half of
the worlds population and more than half of the worlds product came from
Asia. If you took the same snapshot 100 years later in 1900, Asia was still
more than half of the worlds population, but only 20% of the worlds
product.
What we are going to see in the 21st century is the continuation of a process
of getting back to normal. Normal meaning that at some point Asia will be
half the worlds product and half the worlds population. It starts with Japan,
goes on to South Korea then to some Southeast Asian countries like
Singapore and Malaysia. Now it is very much focused on China, and soon it
will be focusing more on India. This process is going to continue through this
century, and our ability to respond to it and cope with it is going to be one of
the great questions for American foreign policy in the 21st century.
I want to come back to that, particularly as it relates to China and Chinas
role in power transition. But let me first talk about the other big shift that is
going on, which is power diffusion away from states, east or west, to nonstate actors. One way to think about power diffusion is to think about the
extraordinary information revolution that has been going on in the last half

century, or Id say 30 to 40 years. If you look at the price of computing

power and communications the cost of communications they declined a
thousand-fold in the last quarter of the 20th century.
Whenever something declines that rapidly, it means that the barriers of entry
go down, and people are no longer priced out of the market. That sounds like
a big number, a thousand-fold, but to put it in your mind in comparative
terms, if the price of an automobile had gone down as rapidly as the price of
computing power, you could buy a car today for five dollars. Thats pretty
dramatic! So lets say in 1975 or 78, if you had wanted to communicate from
Los Angeles; to Santiago, Chile; to Johannesburg; to Beijing; to Moscow
simultaneously, you could do it.
Technologically that was quite feasible. But it was very expensive, and you
needed to be a large government, or large corporation to have the budget to
be able to do that. Today, anybody can do that for free, if you have Skype.
So, here is something where lots of people were priced out of this market 20,
30 years ago and now they can do as they wish.
Or, to give you another example, when I was in the Carter administration,
we had the capacity to take a picture of any place on earth with one meter
resolution, and that was a deep secret. We spent billions of dollars on it.
Today, any of you can go to Google Earth and get a better picture for free.
This is a huge change, and it means that the people who were priced out of
the market for playing a role in international affairs are no longer priced out
of the market. The barriers to entry are down. The effect of that is not that
governments are unimportant, they remain tremendously important, but the
stage on which they act internationally is now a lot more crowded there are
just a lot more actors that can play in that game.

Some of these actors are good Oxfam, which deals with poverty overseas.
Some of them are bad; al-Qaeda. But it is worth noticing that they can make
a big change in terms of what politics looks like. Al-Qaeda, a non-state actor,
was able to kill more Americans in 2011 than the government of Japan did at
Pearl Harbor in 1941. That is the privatization of war; that is a different kind
of international politics.
Or, if you look at the Middle East today, and you look at what has been
happening in, lets say, Egypt, the conventional wisdom always used to be
that you had not much choice in Egypt. You had to either support the
autocrat, Mumbarak, or you wound up with the Muslim Brotherhood;
religious extremists, and there was nothing in between.
But this burgeoning information revolution essentially has filled in part of the
middle. So you found in Tahrir Square a new generation, which not only had
been created by this information, but which now had devices provided by
information technology to solve the problem of coordinating their action
Twitter, Facebook and so forth and thats some very different politics.
Or, if you let me go one step further on illustrating this diffusion of power
that grows out of the information revolution, think of cyber power. We all
think about this, but we dont really quite grasp what it means in terms of
diffusion of power. I dont know if any of you remember a famous New
Yorker cartoon from oh maybe ten or fifteen years ago, that had two dogs
sitting in front of a computer. One dog looks at the other dog and says,
Dont worry; on the internet nobody knows youre a dog.
That cartoon was actually quite prescient, because if we are attacked For
example, if Los Angeles, I think there was an article on the front page of the
LA Times today about the water system, and the dangers of somebody,
perhaps, interfering with the water system with cyber technology.

Or if you think about Chicago or Boston, where Im from, and imagine what
happens if the electrical grid is attacked and all the pipes freeze thats
about as good as a bomb; or many bombs going off. And if that occurs, we
wont know if it was done by a hacker, by a criminal wanting extortion, by a
cyber-terrorist, or by another government. And anybody who is clever among
those four possibilities will have rooted it in such a way that it looks like one
of the others.
So, in that sense, the question of a non-state actor the first three of the
four possibilities that I gave you being able to do enormous damage
without ever crossing our borders by just sending electrons across thats
something quite new, and something we havent quite coped with or havent
come to terms with. So this diffusion of power is a very important dimension
of the 21st century power shifts, and if we are going to cope with that, were
going to have to learn to think about power in a much more nuanced way.
Traditionally, in international politics, we thought of power as primarily
military power. So, for example, the great Oxford historian A.J.P. Taylor
wrote a book and he said, The mark of a great power is the capacity to
prevail in war. But you could make an argument that in an information age,
such as we live in, its not just whos army wins, its also whos story wins.
And the ability to develop a narrative that attracts others with soft power
may be as important as the ability to use hard power.
Think of the case that I just gave you. If you are attacked by electrons from
you-dont-know-where, where do you send your cruise missile? Who do you
attack? How does military force solve this? We are going to have to think in
very different terms about what power is. Thats why these concepts that I
mentioned in the beginning, of soft power and smart power, are going to
become increasingly important.

Now, China understands this. Hu Jintao, the Chinese President, told the 17th
Party Congress of the Chinese Communist Party that China needed to invest
more in its soft power, and it is. And thats a smart thing for them to do. If
youre a country which has increasing hard power, of military and economic
force, and your neighbors notice that, they are likely to be frightened and
form alliances and coalitions to balance your power.
But if you also can develop your soft power make yourself attractive then
it is less likely that they will form those coalitions against you. So the
Chinese are, in that sense, attempting a smart power strategy by combining
soft power with hard power. In many ways, they are spending billions of
dollars to do this: setting up Confucius institutes; creating a new broadcast
system like Al Jazeera, but for the Chinese; they are making major efforts.
On the other hand, the United States really hasnt wrapped its mind much
around soft power, or how to make smart power. Yes, Hillary Clinton uses
the term. Secretary of Defense Bob Gates uses the term. But we are not
really on top of this. If you think of the following example: Gates and Clinton
agreed that an aid program, which was in the Defense Department, should
be shifted to the State Department. But when it was shifted, the budget was
cut in half.
There is something strange about the way we think and talk about power in
this country. We are quite willing to support anything in the defense budget,
and yet we starve the State Department budget. We have a government
which is essentially a giant and a lot of pygmies.
Now I am not anti-defense. I was an assistant secretary of defense. It is
tremendously important. But if you have a political discourse in this country
where you think of power simply as something that you can drop on a city or
drop on your foot, were not going to cope with this new information age in

which we are embarked. So, those are the issues that power diffusion raises
for us as a people that we havent quite thought through.
Let me say a word or two about power transition, to go back to where I
started, which is this movement of power from west to east. The center of
the world economy used to be in the Atlantic, now it is in the Pacific. Thats
great for Los Angeles, but for our country as a whole we have to ask, How
are we going to respond to this? How are we going to deal with it?
Part of the way we understand it, or I would say misunderstand it, is to say,
Well what we are seeing is the rise in China and the decline of the United
States. This is not a very good way of thinking about it. There are problems
with talking about American decline. There is, for example, the fact that
people tend to confuse absolute and relative decline.
Absolute decline is when you lose your internal capacity; this is what
happened to Ancient Rome. Rome, essentially, was an agricultural economy
with very low productivity. It didnt have economic growth. It succumbed to
internecine warfare, and attacks from barbarians on the outside. It wasnt
passed by another country or empire. It basically decayed from within. I
dont see that as much of a metaphor for the United States.
We have problems in the United States. At dinner tonight we were just
talking about some of the problem of improving our secondary school
system, which we have to do. We also have problems with the budget deficit.
Were going to have to come to terms with this deficit in the next half dozen
years, at least.
But if you ask, Is the American Economy going through absolute decline?
No, The World Economic Forum rates the Untied States as the fourth-most
competitive

economy

in

the

world,

after

Sweden,

Switzerland,

and

Singapore. China, incidentally, is 27th. It is also worth noticing that in many

of the new areas nanotechnology; biotechnology the United States is at
the forefront. And, if you think about the entrepreneurial spirit in this
country, most surveys of entrepreneurship rank the U.S. as number one. So
this is not absolute decline.
But there is also relative decline, which is that if one country is here, and
another country is here, and you move it up closer, you could portray that as
relative decline the gap isnt as big. But it is also worth noticing that while
the rise of Asia or if you want, the rise of the rest means that that gap
between the United States and the others is narrowing. It doesnt necessarily
mean that they are above us. We can still be ahead. But the gap between us
is less, and that could be called relative decline.
But the word decline is not very helpful. It doesnt give you a real picture of
what is happening. So if you look at this question that preoccupies a lot of
people: Is China catching the Untied States and passing the United States?
My answer to that is, No, though the polls show just the opposite. There
was a poll recently that shows that the majority of Americans think that the
Chinese economy is larger than the American economy. Thats simply false.
We are three times larger.
But the American psychology it tells you a lot about psychology, not about
facts. But at some point the Chinese economy is likely to be as big as the
American economy, or bigger. If you have 1.3 billion people, growing at 10%
each year, eventually the lines cross. But at the point where the Chinese
economy is equal in size to the American economy, doesnt mean it is equal
in composition, and per capita gross domestic product is a much better
indication of the sophistication of an economy.

On that measure, China is not going to equal the U.S. for another couple of
decades, if then. And if you look at military power, again the Americans are
likely to stay well-ahead of the Chinese for another couple of decades. And
on soft power, which I mentioned earlier, the Chinese are making huge
investments in soft power, but every time they succeed in this area, their
own internal authoritarian system undercuts them.
So, for example, they got a lot of credit for the Beijing Olympics and the
Shanghai Exposition, but then they go and lock up Liu Xiaobo, and prevent
him going to the Nobel Prize Ceremony, and that undercuts that soft power
that they built up. So, I dont see China passing the U.S. in power in the next
few decades.
But why should we care? What difference does it make? After all, power isnt
good or bad, per se. It is like calories in your diet: too little and you expire,
but too much and you get obese. So, there is nothing to be said just for
having power. The reason its important to think clearly about this, and not
talk about American decline and so forth, is that in periods when you have
one country rising, and a fear of decline on the other, it can lead to great
turmoil.
So, for example, many people say that World War I was created by the rise
in power of Germany, and the fear that created in Britain. There are some
analysts who say that this century will have a great conflict created by the
rise in power of China, and the fear that creates in the United States. I dont
believe that. I think it is a bad analysis and bad history. For one reason,
Germany had already passed Britain by 1900, and if you believe what I said
a minute ago, China is not about to pass the United States for decades.
That means we have time to manage this rise of China, and to shape the
environment, essentially, to encourage China to become a more responsible

part of the international system, and discourage them when they misbehave.
And that is going to be, I think, the key question for us as we deal with
power transition.
So, with power diffusion, we are going to have to think, How do we deal
with these new, non-state actors? With power transition, How de we deal
with the rise of the rest, and work with them in such a way that we maintain
our leadership? But we are going to have to think about leadership in
different ways.
We often think about leadership as sort of being king of the mountain, and
you give commands down a hierarchy. But, in fact, in an information age,
leadership may have much more to do with being in the center of the circle,
and not giving orders, but attracting people to work with you in networks
that can accomplish things.
One way of thinking about power in the 21st century and Ill conclude with
this is to think of it distributed differently in different areas. It is a little bit
like a three-dimensional chess board. On the top board of military relations
among states, the United States is the only superpower. It is the only
country that can project military power globally. I suspect it is going to
remain that way for another couple of decades. I dont think China is going to
pass us in that.
Go to the middle board of economic relations among states, and the world is
multi-polar. There are many powers. This is the area where Europe can act
as an entity, and when it does its economy is bigger than the American
economy. And you also have China, Japan, and others.
But go to the bottom board of transnational relations, things that cross
border outside control of governments: things like bankers transferring

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financial flows that are larger than the budgets of many countries. Things like
terrorists

groups

like

al-Qaeda,

international

criminal

cartels,

cyber-

terrorism, or impersonal processes like climate change and pandemics.

Nobody is in charge here. Power is chaotically distributed. It makes no sense
to call this uni-polar or multi-polar. The only way you can deal with these
bottom-board issues, which is where the diffusion of power is occurring, is by
organizing cooperation among governments.
And you get that cooperation by using your soft power to create networks
and institutions to cope with these problems. Thats where the United States
has to learn how to think more clearly about power; to realize that just the
image of the Lone Ranger going in and shooting things up is not a very good
image for how you deal with the kinds of things I mentioned like climate
change, cyber security, pandemics, and so forth.
Unless we cope with that, we are going to have trouble. Or, another way of
putting it: youre playing a three-dimensional chess game and you focus on
one board only lets say the board of military power. In the long run you
are going to lose. We are going to have to broaden our public discourse the
way we think about power to understand that, yes, military power remains
important, but it is not the only form of power, and smart power strategies
have to learn how to combine military and soft power, in different
circumstances, to get successful strategies.
So thats the lesson of my book. Whether itll succeed in converting anybody,
Im not so sure. But, I do hope that it does convert some, because if we
dont we are going to have a much harder time coping with these two great
power shifts of the 21st century: power transition and power diffusion.
So, thank you very much for your attention.

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