| Thank you. I am still glowing at the ceremony yesterday where you awarded me that great honor of the Seoul Peace Prize. Again, I thank you. Everybody is interested in the future and would love it predicted. But I cannot predict the future. I don't know what will happen. But I do know that what happens will reflect the way people address the problems that are in front of them. The future is not foreordained. It is shaped by what people do with their problem and their opportunities. |
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| I first served in Washington in the administration of President Eisenhower. And I remember vividly a session that he had with us while we were planning how, as a government, we would respond if there were an attack. And most of us thought that it was a remote possibility. And he was trying to jack up our interest and get us to understand better what was involved. |
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| He said to us--Probably reflecting his experience as a great general--that plans are worthless, but planning is essential. What he meant was that when the action starts, unexpected things happen, and it does not go exactly according to your plan. But if you have not engaged in a process of planning, of trying to think out what is likely to affect future operations, you will not be equipped to respond, and react and to take advantage positively of things that are presented to you. I have always found that a very profound remark, as one tries to tries to think out ahead into the future. |
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| So I'm going to talk about the future in terms of things to focus on that will--depending upon how they go--have a big impact on your country and on my country: things that leaders will have to focus on, and try to shape to their best advantage. And these factors that I'm going to identify and discuss briefly will probably strike you as a mixture of international things and domestic things. But I want to say to you that a beginning of wisdom these days is to discard to a large extent that way of categorizing issues because the fact is more and more that we are part of a global environment. And things that we used to consider purely domestic have repercussions that our boundaries have great domestic implication. And therefore if we think of them as domestic issues, then we have to try to make them work to our advantage. |
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| So the first issue that I want to call to your attention is the question: how open is our world going to be to international trade and investment? Remember that at the end of World WarⅡ, some creative statesmen designed an international economic system, the center of which was an effort to make trade more open between countries. They remembered the Great Depression era of the 1930s, the devastation to our economies from efforts to protect those economies against the international flow of goods, and the result of that not only being economic devastation but also one of the propellants to war. |
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| So this question of openness was addressed, the organization of the GATT was put in place, and through successive rounds of negotiations the world has become a more and more open trading system. And we have all benefited from that tremendously. You have benefited in Korea. We have benefited in the United States. So the question is: what about the future? Will we continue to move toward more openness, or will we go backwards? |
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| As you know, there is underway a negotiation under the General Agreement of Tariffs and Trade, the GATT, going on now. And it is possible, certainly, that this round will succeed. But if you are a betting man or woman, you would want some pretty good odds before you bet on it unfortunately. If this round fails, then we will have missed an opportunity as a world economy to improve ourselves, and probably the tendency will be for people to move backwards for protectionism to gain in strength. And it will be an important activity of leaders in all countries to work to prevent that kind of backsliding, and to do everything they can to keep the effort going, to make trade more open, if not on a total world basis, at least on a bilateral and regional basis. And I believe you will find that the United States as the world's largest trading country will continue to try to give leadership toward open markets. |
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| But it takes genuine political will and determination to maintain a process of opening markets, because all of the political pressures tend to be otherwise as people with a special interest in protecting a particular sector of competition. So this will be something to watch carefully as a marker for the future, and it will be something that leaders in every country, I believe, will be called upon to take their positions about. |
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| The second factor of tremendous importance in each country -- but the aggregate of what countries do has its effect everywhere -- has to do with the rate of increase in the supply of funds, in the supply of money that represents the way in which economies move forward. If you look at a chart of something approaching the world money supply and its pace of change in recent years, what you see, reflecting developments primarily in Germany, Japan and the United State, the three biggest economies, is that line sort of fell off a cliff somewhere around 1990.There are reasons for, but that fact has had a profound effect and has cooled off the world economy dramatically, and every country has felt it. |
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| The situation in Europe right now gives a vivid illustration of what can happen when countries mismanage the way they relate their currencies to each other. Because what we have seen in Europe is big political event, the unification of Germany, which had big economic consequences, which the Germans have been coping with. But the problem facing Germany is totally unlike the problems facing Britain, and other countries on the continent. So when they try to hook themselves together tightly, that tight link was bound to be broken apart by the forces of the marketplace. And I might say it has been devastating to the leadership of those countries because they fail to foresee and cope adequately with the problem that was hitting them. |
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| A third factor of tremendous significance stems from the great diversity in our world : ethnic diversity, national diversity, linguistic diversity, religious diversity. And that diversity has been asserting itself of late, and in many cases it has erupted in the form of conflict. But every country is affected by how well individual countries and how well in the world at large we do in governing over diversity. |
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| Perhaps you think the problem is limited to, say, the old Yugoslavia or the old Soviet Union. But I believe everybody faces this issue, even countries which are, like South Korea, rather homogeneous in their makeup. We face it in the United States because we are the most diverse country on earth with people form everywhere. And so, interacting with diversity for us is like breathing. It's all around us, and it gives us some problems. But we're accustomed to it, and so it's relatively easy for us to interact around the world. |
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| But Korea also faces the problem. You are relatively homogeneous, so you have the advantage of the cohesion that allows you to develop. On the other hand, you don't live in isolation. So you have to interact with that diversity. Therefore you have to come to understand it and find your own ways of relating to that diversity. So we have a problem in the United States, you might say, on one side of the coin. You have the same problem, but you have it form the other side of the coin. But we both and we all have that problem to think through. |
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| I am going to mention three other factors. But in the interest of allowing time for questions, I will just mention them, identify them and say a word about each. |
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| A question will be whether we will be able to keep in benign hands adequate military capability. There is a tendency when old adversarial relationships decline to say that we don't need a military capability. And clearly when there is genuine decline in old adversarial relationships, our needs are less, and no doubt different. But if we react to new opportunities and situations essentially by depriving ourselves of the ability to look after security arrangements of whatever kind may arise, we are likely to do ourselves a disservice in the long run. So I think that's something to watch around the world : how well does the United States do? : how well do other countries do in equipping themselves to react to security problems? And I might say just on a very personal level that I am not at all an advocate of Japan remilitarizing itself, or Germany remilitarizing itself. I think that we have bad experiences, and we should learn how to provide for security in some other way. |
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| The fifth item to watch carefully has to do with the production of savings in the world, savings meaning 'refraining form consumption' so that you have resources to devote to investment for the future. So I think the capacity of the world to save will be a measure of an ability to invest in the future and to provide for the future. Each country will face this issue. But with the mobility of capital that we see now, it is also important to think of it on a world scale. |
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| And I believe myself that there are some important problems because I do not quite see where the additions to savings are coming form. And I do see the insistent need almost in every country and dramatically in some countries for major investment efforts, in infrastructure and many other things. So this is another item to keep your eye on. And if the concerns I have are right, it means that the rates of interests you will have to pay for funds will rise. |
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| At our breakfast table here this morning, I was introduced to the Minister of Education and I said "Maybe you should have a different title. Maybe you should be called 'Minister for the Future' because that is what education is about, the future. |
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| We increasingly are living in an information and knowledge age. The industrial age is way behind us. It is a different environment that we're coming into. The individuals and the countries that will do well are those who educate themselves well, to take advantage of the possibilities in a knowledge and information age. So this is another critical variable to be looked on at each country and for the interactions among countries to be considered strongly. |
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| So I have tried this morning to talk about the future by identifying key subjects that can be worked on by the leadership and people in each country and which also call for an ability to work among countries if we are going to be most effective. Openness of trade, understanding and managing the money supply, governing effectively over diversity -- understanding it, and being able to interact with it, maintaining our capability to look to our security and to deter aggression, dealing with the question of savings which will govern our ability to invest, and looking to the future especially as we consider how well we are doing in educating our young people. I believe these are the key variables. |
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| I also believe that if they are handled well in a country and If they are handled well in the interaction among countries, then the outlook for our world -- say we project five years, ten years -- is dazzling. But it is also possible to handle them poorly. And if that is the case, then we can see conflict and a far poor economic performance than we would like. So say let us think carefully about our leaders and our policies, and let us understand how to work effectively together and with the right combinations we can have a future that is bright, Thank you. |
