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My name is Gary Segura. I'm the Dean of the Luskin School of Public Affairs which is in this building. We are very pleased today to partner with the Burkle Center for International Relations to host Nicolas Berggruen to talk about his new book. And the book is titled Renovating Democracy: Governing in the Age of Globalization and Digital Democracy. Nicolas co-authored the book with Nathan Gardels, who was actually an alum of the urban planning program here at UCLA law school. He is not going to be able to join us today. But the conversation with Nicolas who, as some of you know, is the founder and chairman of the Berggruen Institute, a think tank where he hopes to envision innovative change in governance and geopolitics for the future.


And he is also the chairman of Berggruen holdings.


He is going to be in conversation today with Kal Raustiala, who is a professor at UCLA School of Law and the director of the Burkle Center. Kal teaches in the program on Global Studies and focuses on international law and international relations. He's the director of the Burkle Center since 2007. And the Burkle Center is UCLA's primary unit for international research from an interdisciplinary perspective. We're going to have a conversation about the book after which I understand there will be an opportunity to sign books, and there will definitely be time for you to ask your questions.


So if everyone would please join me in giving a warm Bruin welcome to Nicolas Berggruen.


Alright, welcome everyone. Can everyone hear us ok? Are these working, working well enough? Okay, perfect. So, thank you Dean Segura. Thank you Nicolas for coming out. I think as, as the dean mentioned, we're going to talk about this book. I just want to say a word though about Nicolas and the Berggruen Institute. And it's an honor to have you back here. This is I think at least the second time you and I have been in this setting, maybe you've been on campus probably many other times. But the Berggruen Institute and what Nicolas is doing in this work is really very, one very interesting. And two very important because Nicolas has put together a terrific team of people and invested a lot of resources into the pursuit of ideas, which is something that we obviously take very seriously here at UCLA. So it's great to have them. So what we'll do is we'll start off conversation between the two of us and then I'm going to open it up for questions when you're. When it's time for questions, just please raise your hand and wait for me to call on you. But we'll have about an hour total. So I thought we would begin by discussing. There's a number of different elements in this book. But I want to start with California because you really began your interest in governance issues, at least in terms of your writing, and in terms of the structure of this book with California. And one of the things you note in the book is that there is, there has been a kind of crisis of governance. And you talk about both political tribalism and the rising political tribalism fed by social media, and what you call digital capitalism, in which we increasingly see economic growth and activity in the digital sector. Obviously, these things are reflected in California.






You discussed that in the opening. But what was noteworthy to me was that California today is actually, I would say, very well governed, not particularly prone to tribalism. In fact, we have almost entirely democratic governance in the state. Maybe, you know, increasing still today. And so I was curious that, as you've watched the arc of California, is California a model today? And in what ways is it a model for some of the problems that you diagnose? So maybe use California as a jumping off point for identifying some of the key issues that you raise?


Well, thank you Kal. Does this work? No. I don't know.


Totally incompetent. There we go. Better.


Works. Okay. Thank you. Thank you Kal, thank you Dean Segura, thank you UCLA.


Wonderful to be here. Maybe we should be in the garden. Most beautiful day in the world, the most beautiful sculpture garden right next to you.


So I think to answer your question, I think it's, frankly, all of this. Okay. Meaning, I think California is


in some ways, could be the most interesting,


not always positive, but I think generally quite positive laboratory of democracy. Because California has everything going. Number one, it's one of the most creative, productive places on earth. It's a pretty big place. It's a highly diverse place that has become more and more diverse. And it has all the problems that exist in successful


countries including inequality.


And today, strangely enough, and interestingly enough, it's basically a one party state. So it puts an enormous amount of pressure on the government on the party to come up with solutions. If you have a monopoly of power in a strange way That's considered bad. But it also puts a lot of pressure on whoever is in government to come up with solutions. There's no enemy. The only enemy you have is yourself. And, and therefore you It puts a lot of pressure to, to come up with solutions. And I think that California has had it has in the concert, I mean, in the context of what is the democracy has all the elements again, good and bad. It has very active elections. It has a government that's big. It has services that are also across everything. It has a referendum, system, direct elections, on issues. It has money in politics, it has all the issues that are faced by the US and the democracies, many democracies not all around the world. In one place, so I think it's a real laboratory.


Also, to follow up on the one party part. So just to preface sort of what's here, there's so there's a number of, I think, maybe three might differ with this characterization, but three basic topics that are covered, all of which are interrelated. One is the issue of dealing with governance and democracy and finding a way to keep the passions of populism in check, and make sure that we actually have governance that's driven by considered deliberative thinking rather than just kind of reaction, political reaction to how do we deal with some of the drivers of that political reaction, which are economic? And we'll get to that in a moment. And then three, how do we deal with the global dimension, in particular the relationship between the two largest political and economic systems in the world today, the United States and China. So just to talk about China and California for a second, it is interesting to note that California is essentially a one party state As I characterize the People's Republic of China, but they're very different one party states and so is there something about partisanship and the role of political parties that you think is problematic in the way democracy is operating around the world today is in other words, is, is our party dynamic actually problematic?


Well, I think that in the past, I would my own opinion, it's just my opinion, is I think political parties and in a number of different political parties, competing, I think was probably a good thing, meaning you had different voices, important voices competing, and the parties in essence, were the Federated of different voices, different cultures. And they were the editors if you want for the public, but today, you can see this in the US, but you can see it in pretty much every democracy Political parties have lost a lot of power. And they've been captured by different people, generally demagogues who've sort of taken, you know, a constituency or in a traditional party and claimed it as as the parties are so desperate to get votes in to get elected to tell, you know, they'll take whoever will claim them, and who's popular as the leader. So it's actually today, I think it's become not productive. Part perverse in the US, you can see party politics. I would say don't bring people together the opposite divide. In Europe, same thing. So I think that you've got two aspects, one, traditional editors if you want political parties, traditional media has been disintermediated. I mean, politicians, and anybody now can talk directly to millions, hundreds of millions So people. So that's one aspect. So the political parties in a much less important. So I think that easier to think Well, what's the new model? And the new model? You need probably other intermediaries and just political parties. And two other questions. The other aspect of the question is, is a one party system a good idea, I would say generally is not a not a good idea. But it depends what the culture is, and what the, what's behind that one party. If the culture is such that the party has a monopoly of power, but also the responsibility to deliver service citizens, then it may actually work. And I think it's highly culturally dependent. But you could argue that has worked for China. It has worked in essence for Singapore. So you have in in China, you have one party That has a monopoly. But if you look at the long history of China thousands of years, the manual it, which was expression of power is not just an expression of power. It's also a delivery system of services. And China was always a big place. And government always had the responsibility to deliver services to manage the place. And I think it's still the case today. So the pressure on this one party is enormous deliver. Singapore is quite similar. It's worked for those. I don't think it would work in other cultures that easily. It was a case, frankly, in places that were neighbors of China that were confusion cultures. So I think it's very, very dependent on culture.


I mean, it's interesting because I, I would say, I mean, I am a democrat and I, I support the Democratic Party in California and I do think California is very, very well run with Right now I'm happy with the state of the state in a lot of ways, we have a lot of problems, but we're better than we were in the past. And it is striking Normally, I would agree, of course, we need multi party systems that sort of baked into our conception of democracy. And yet somehow in California, we're doing very well with a republican party that really can do almost nothing except snipe at the edges. So it's just was an interesting thing that kind of came out as you, as you talked about the evolution of governance in California. So let me kind of pivot to the third part, the middle part of the book we're going to come back to, to both kind of democracy writ large and the relationship with with China. But one of the more interesting ideas in the book and a really kind of original way to frame the problem of engagement with the coming economic changes, in particular, the move to increasing job loss to robotics, to AI and so forth. As we I think many of you know from following the current political debates, there's a lot of attention to universal basic income. So Andrew Yang has made a big point of that. What you present that's distinct in this book is instead something like universal basic capital and determine pre distribution, rather than redistribution. So in other words, rather than some kind of after the fact, redistribution of wealth, or income in a society, instead of pre distribution, correct me if I'm mischaracterizing this, of the basic capital of a society, in particular one that's increasingly built on technology. So expand on that, if you will, about why you think universal basic capital makes more sense. And how would it work in practice?


So the question is, in a environment where intellectual property, in essence, technology is becoming more and more valuable, how do you distributed fairly and historically, the ideas Simply will take for from the cash flow, in essence, the profits from the people who benefit and from the owners of the IP and redistribute, I think it's going to become harder and harder and more and more has to be redistributed because more and more think of the value of the wealth is going to be concentrated in the IP. Today, if you want to start a business, especially technology, you don't need that many people. You want to employ necessarily that many people and you don't need that much capital. So capital and people are needed less than less to create value, but you still need to, in a fair society, in a rich society, you still need to spread the gains. So the question is how universal basic Come, I think, almost make things worse. It sort of takes money gives it and it's necessary in my mind. So the idea is not a bad idea, meaning the the intention, I think is good. But the mechanism, I think only addresses some of the issues. More important is not redistributing, but really making everybody be part of the same journey, putting everybody on the same side of the fence. And making everybody an owner would be, I think, much more productive. Also psychologically much more empowering. So our idea is make everybody an owner as opposed to taxi robots. Everybody should only robots. And the question is, how do you do that? So simple way and you could test it in California. simple way would be, let's say, how did you start a new company called Google? Okay. Hello. opposed to you owning 100% of it. Maybe at the federal level, you would own 70% 30% would go into a big sovereign wealth fund for the benefit of everyone. If you did it at the state level, maybe it would be 95% and 5%. And that would be in lieu of taxes or lower taxes for fair from your standpoint. But the key there, that the state that's owned by the state where everyone would be a fund, that would be for the benefit of all citizens. Here, people who mean anybody who's that same California, in the case of California, the same at the US level. So if you're successful, you'll be successful, no matter what


company will be a success. But everybody who's a citizen,


or in the state,


anyone who's living in California, would benefit from the success so it changes Dynamic very much. It makes everyone a participant and an owner. And economically, I think it's very empowering, psychologically very empowering. And one country has done it frankly, in in, in fact, not a name, not a popular country in the West, but incredibly successful, very small country. But they've proven that they can do it, which is Singapore. Singapore has, is an owner of a lot of the


productive assets.


In Singapore, its own through sovereign wealth fund, which is the biggest contributor to the budget.


The budget is funds everything and


healthcare, education, housing, everybody gets housing in Singapore.


As a result, it also is has very low taxes. We have low taxes, high deliveries in terms of services, and everybody benefits from Virtual circle, including the state, the state, as opposed to being a data is actually an owner. So it changes the dynamic. So this is one example of doing this. You could have savings plans Australia has a superannuation savings plan, you have a number of different countries that have savings plans that are very dynamic, where people benefit, again from the growth of the economy, as opposed to just funding the death of the country. So it changes the dynamic if you're an owner, as opposed to just being a recipient of government funds.


So just to kind of drill down on the practicalities, because there's an interesting vision and it's an attractive one. So you pointed out Singapore, how do you distinguish, let's say a country like Norway, where there instead of maybe a whole swath of the economy, it's very particular kind of thing, but they also have many other countries have sovereign wealth tons in which there's some kind of generalized ownership. How do you distinguish those?


Well, Norway's a good example, So Norway, another small country, but has a lot of oil. So they've made a decision to put all the oil reserves into sovereign wealth fund. And it's issued once about a trillion dollars. I think it's more today. So the country get the benefit, meaning all citizens, which, you know, and they fund everything, healthcare education is very high quality. Well, what's the oil of the 21st century?


Is that so?


However, it's pronounced this is a


this is what this is what is America produces terms of


terms of, you know, its technological assets. And it's also what's being produced every day by all of us, all of you all of I mean, as, as users of any social platform, you are really working for the platform. The platform to collect a lot of data that is very valuable, the data has become the most important thing. So the question is, how do you what do you do with that data? Well, you can, you should be owned by citizens. The question is how, you know, and, but that's really the oil of of this of the century.


And I think Governor Newsom has already proposed some kind of data dividend idea that's kind of, I guess, has a family resemblance at least. So as a practical matter, it sounds like the state in your proposal, the state in essence, whether states, California, the United States, Singapore, whatever it may be, is really the owner and then somehow each of us as individuals would have a slice and I think you talked about using blockchain and other technologies as a way to make that a reliable thing and which we all have a tiny slice. But in like the Norwegian system or the Singaporean system, it sounds like the government is taking those proceeds and then reinvesting them in the society. Rather than Handing, in essence a and income check. And so from the perspective of a citizen, is that really the key distinction that, that you're not getting a check, but it said you're getting better roads, but our housing better infrastructure?


I think, you know, this, my own feeling is that there is not one answer. Number one, it needs to be developed. I think it'll be a mixture. I think that it's nice that part of it in the case of, for example, Singapore or Norway. The resources end up in, you know, a sovereign wealth fund. So it's actually not the state owning it. It's the citizens owning it, but to have fun, which, by the way, can be run totally independently from the politics, which I think would make sense.


So should be run independently. Yeah. Yeah.


But, so the fund is one, but I think this very easily, you could also take part of it in a tribute to individuals. You mentioned blockchain. So with technology is much easier so you could very well have That, that finances, things that are public goods for everyone that should be at a certain level certain standards for everyone like education and healthcare and security, maybe even housing, transportation. And then certain things that that are yours that I cows. And you could supplement that with savings. So you could, you could, in theory, send money in. But as opposed to a retirement plan, which only allows you to take the money at the very end of your career, I think be much more productive if you could draw on it during your lifetime. So as a child as a baby, you wouldn't make this decision but your parents could take up to a certain level, maybe fund certain things in your early career. You could fund educational, certain things. If you wanted up to a level, then if you could, you know, say a half time so certainly things, you know, you want to take a break for six months for whatever reasons you could grow on it. So you'd have some flexibility in terms of both funding and, and withdrawing.


So let's turn to the comparisons you make with China at the end of the book, but also in the beginning, when you talk a lot about California, there's a number of parallels. One of your early efforts was, maybe it's still around, is the Think Long committee. And so one of the things that I've noticed in in this book and your previous work with Nathan was a concern with the long term and thinking in a long way and the problem of our short term politics, and you characterized when you talk about California and some of the progressive, Progressive Era changes, early 20th century changes in the way that we structured for example, referendum and initiative, recall, etc, that, well, those were empowering to people they actually lead to problems in implementation, because ultimately, they just became captured again. My special interests and often short term thinking. And so all of this to say, I guess, boils down to a concern that what we need our deliberative bodies, within our governance structures. And you noted with regard to China a moment ago, that there's a long history and there's an extremely long history in China of having a kind of exam based bureaucracy at a very high level of competence. Singapore being another place, coming out of a Chinese culture that exhibits that kind of long term thinking and expert driven decision making. So how can we realistically achieve that kind of long term thinking here and whether it's in California or just in the West generally? Is it a realistic thing for us?


Well, I think it's very hard, especially in in the world of social media, where attention is, you know, the platform seek men, frankly work. But individuals we are trained to seek attention into engaging in a short term way. So I think it's very, very hard hill to climb. But I think on the other hand, we have no choice, but to try to get there. Because otherwise, you know, we're going to consume our future, as opposed to build our future. So I think that's the difference. I don't think it's impossible. Your question is you have to change what, you know, the way we operate. We did create at the Institute, something called Think long committee for California. It was a bipartisan committee. I think 14 Republicans and Democrats. Well known names in name actually came from George Shultz, who because he, he gave us he was one of the participants. He was the name of Think long as opposed to saying short. And we came up with a number of proposals to make some reforms in California, including changing the referendum system itself, tax reform and others like part of what We advocate it and still would advocate today is that we take certain issues, including issues that are going to be voted on by citizens. Through referendums. We take some of these issues and debate them in committees, citizens committees, a little bit like juries. So you put people together, physically, in a room to debate, difficult issues, and what has been proven? And then they would recommend that they would roughly they would say, all right, we looked at this issue, these are the pros and the cons is that the unintended consequences, and they would share their recommendations with the general public with the elected officials and with the administration so that it would be something that is used to everyone.


And would these be standing groups, in other words, every citizens group that would be covering a number of different issues or kind of on an ad hoc basis for each referendum,


I think can do both. And you should do both. And it's been shown in number of different places that this is quite productive. Actually, there was a recent example that you can look up in Texas, I think 500 people was covered by the New York Times. So you can you can read about it, I think is about two weeks ago, a group of about 500 people were brought together for, I think, three days to discuss the most difficult issues. And interestingly enough, they came.


They came up was, you know, reasonable.


People with extremes came up with a lot of ideas that, frankly, were bridge between the extremes. You have to give credit to California in this case of this is the work of Jim Fishkin at Stanford. Sorry, it's not UCLA, but we like to say Group, a group here in LA called Helena, young group of people who've worked on these issues. So California origin, but implemented in Texas, and it just showed, I mean, I would recommend to look at what the New York Times reported. Because it, it shows a few and we've seen it, but we had Think long committee for California. At that time when the Republican Party had more this was about 10 years ago, when the Republican Party had more of a presence. We had a small committee and said 14 of opinionated, smart, but opinionated people, and because we debated difficult issues, we did it over a year, maybe 12 meetings, day meetings entire days. We came up with solutions. Actually, they shared on with his website. Welcome minister, California, we came up with solutions, even though the participants were obviously from different parties with their very different opinions. So I mean, I think


you have to depoliticize


you know, difficult issues, as opposed to doing everything through the ballot box. Everything through, you know, media fight.


So let me ask one final question about China give you an opportunity to talk a little bit about some of the points you make about China, and I'm going to open it up. So in the end of the book, throughout the book, you do discuss the Chinese example, because it's such a significant relationship between the two countries. But at the end, you have a long discussion of the US China relationship and all the challenges within that relationship. And so I guess I would, and I would like to hear a little bit about what do you think is going right between The US and China today, right now, what are we doing? Right? What is the Trump administration doing? Right, if anything? And then what are a couple of suggestions for how we need to reorient that extremely significant relationship?


So, I,


I think today Well,


I give you sort of my thinking on this.


China in the US, couldn't be more different culturally and politically. Because of that, my feeling was that one way or another, sooner or later, there will be a series of cultural flush, which could lead to political flush. So it's inevitable question is, how is it expressed? And what has happened is that the current administration has sort of made this class Front and center in immediate through the trade war. So I'm attacking and so I think it was going to happen sooner or later in the question is, how do you manage it? Because my own feeling is you have to manage it. You have to find a way to coexist between China and the West. Because China is not going away. China's not going to change this political system or its culture anytime soon. And we're not going to go away. And we're not going to change our politics and our culture, either. But both of us are so big, like two elephants. I see you have two elephants in this room. Well, you have to find a way for them to give each other space. And in truth, I think there is a way to make it a win win. I think it was a win win. It was a win win in terms of trade. It was a win win in terms of


culture previously.


Yes. And I think that Now it's been made into potentially a lose lose, if you have no trade or less trade, both sides losing my mind. And if you have a cultural clash, which could become a political flash UN becomes a serious potential loss.




was a developing economy is now quite mature to challenge China in terms of trade practices, I think makes sense. So and that's, you know, in that sense, this China need to open up economically. Yes. Is it right for the west to push for that? Yes. The question is how, but to sort of say, all right, we lost as the West because we empowered China. I think that's not I think that's a mistake to think that China's a huge market, consumer market is only going to grow, so it's going to be a very good consumer. It is already coming. humor of our goods. The question is, is it a consumer of our capital? Not really. So that's where we need to fight for a chance to as an investor, to benefit from China's growth. But also, frankly, on the other side, as consumers, we in the West have benefited enormously from China. I would almost argue, especially for America, the trade deficit has been a benefit to America. Because if you're the reserve currency, somebody else is working for you. delivers good to you and finances them. Not so bad. We've benefited enormously from that relationship. So question is how do we find a way to coexist? Because if we don't, I think we, you know, we're not going to be as prosperous you know, in terms of the US, and we're also going to be in much, you know, much danger


just to close up You talk about spending some time with Xi Jinping in the book? Does he see it the way that you just described?


In short, yes, but I don't I mean, we may have very different opinions on the specifics. He may have a different opinion on trade, that the Chinese just his perspective, but I think it's very much the Chinese perspective. I hope I'm not wrong in saying it this way, is that I think China has had, as we've talked about a long culture, long presence on the world stage. And they feel that in this is probably true. This was long before us a century and a half ago. They were they, they were humiliated by the West and now they've worked very hard to have a function in place. And frankly, they want respect from the west and they want to be treated as a


Almost like an equal to the west.


And I think that's fair. And I think that unless we can accept that, which is very difficult, because one thing that I feel, which may sound a little abstract to all of you is that we in the West, have a certain way of thinking of things which comes I think very much from our culture, from our religions, which is that we see everything as one truth. And one way, one ideology. And here for the first time, we'll have to


accept that they may be


at the same time as our truth, another truth that is alive, meaning a different political systems, a different culture, not one we want, but one that we need to coexist with and respect. And that's very hard for us to do. If you think about religions, had to come from Europe, where for thousands of years, you had religious wars between cousins, I mean, Protestants and Catholics, you had the Crusades and others between two monotheistic religions. So the real question is, can we accept, in essence a different religion?


I mean, I would say the seeds of that are baked into our Westphalian thinking but whether we can continue that is is another story. It's a great place to end. Thank you Nicolas, thank you to the Luskin center. Thank you all for coming.

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