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What Does A 'Post-American World' Look Like?

America's dominance on the world stage is fading, says commentator and CNN host Fareed Zakaria. He explains why the U.S. is now lagging behind other countries on key indices such as patent creation and job growth — and what that could mean for America's economic future.

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What Does A 'Post American World' Look Like?

TERRY GROSS, host:

This is FRESH AIR. I'm Terry Gross.

America may be the only military superpower in the world, but in all other
dimensions - industrial, educational, social, cultural - the distribution of
power is shifting, moving away from American dominance.

That's a quote from the new updated and revised edition of the book "The Post
American World," which was first published by my guest, Fareed Zakaria, in
2008. He says we're not moving into an anti-American world but a post-American
world, defined and directed by many places and many people. This doesn't
represent the fall of the U.S. but rather the rise of the rest.

His book is about what this new shift means in terms of war and peace,
economics, business, ideas and culture. Fareed Zakaria is editor-at-large at
Time magazine and host of the CNN Sunday program "Fareed Zakaria GPS."

In 2010, Foreign Policy named him one of the top 100 global thinkers. He grew
up in India but is now a U.S. citizen. He first came to the U.S. in 1982 to
attend college.

Fareed Zakaria, welcome back to FRESH AIR. Before we talk about your book, I
just want to get your impression about the Arab uprisings and its global
impact. One of the things that first made you famous in the U.S. was a piece
that you wrote in October of 2001 called "Why They Hate Us," and this was a
piece that was to help us understand terrorism and 9/11.

So now that there's so much anger in the Arab world being directed at Arab
governments, how much of a game-changer is that in terms of the way the U.S. is
seen?

Mr. FAREED ZAKARIA (Author, "The Post American World: Release 2.0"): I think
it's an enormous shift. If you remember that piece, it was written two weeks
after 9/11, and it was the cover story of Newsweek. And my basic point in the
essay "Why They Hate Us" was that in order to understand the rise of Islamic
terrorism, you had to understand that in the Arab world, you had had
dictatorships for 30 and 40 years that had prohibited any kind of dissent.

And as a result, opposition movements had grown that were within the mosque,
the one place you couldn't ban, and that use the language of Islam, the one
language you could not censor, and that therefore you had these extreme
religious, fanatical jihadist movements rise. And that until we did something
about the dictatorships of the Arab world, this was going to be a festering
problem.

So when we watch the Arab spring, and we see the democratic movements - and
they really are extraordinary. If you think about, in the final days in Egypt,
you had eight million people out on the streets, one-tenth of the population,
peacefully demonstrating for democracy - that's the largest pro-democracy
demonstrations in human history.

So when that happens, I think what it does is it changes the narrative of the
Arab world. It means that it discredits the violent jihadist movements. It says
there's an alternative narrative out here, and as a result, it could be a game-
changer not just for us, you know, selfishly in that it means they will hate us
less because they don't view us as supporting those dictatorships, but it also
could be a game-changer in bringing 300 million people into the modern world.

GROSS: And you combine that with killing bin Laden. That's a game-changer, too.
What changes do you see that bringing about?

Mr. ZAKARIA: Well, I think it's a one-two punch, if you will. You know, the
first was this extraordinary rebuke, repudiation of al-Qaida's founding
rationale, right? Al-Qaida says we exist because there are these terrible
dictatorships in the Arab world, and the only way to get rid of them is through
violence and through Islam.

And then what you find is a majority of people in the Arab world say we agree
with you on the dictatorship part, but we think there's a way to get rid of
them using democracy and peace, rather that violence and Islam.

Then on top of that, you get bin Laden himself dying. I think it's important
because bin Laden was al-Qaida. When people joined al-Qaida, they signed an
oath of personal loyalty to Osama bin Laden, much as members of the Nazi Party
had to sign a personal loyalty oath to Adolf Hitler.

He was the charismatic guy. He was the guy with all the contacts in Saudi
Arabia, which is where a lot of the money came from. So I don't think it's -
this is not a bureaucratic institution, where you can simply replace him with
the number two guy, and the COO becomes the CEO, and the company keeps running.
I think this is a pretty crippling blow for al-Qaida.

GROSS: Do you know, personally, any of the people who have been involved in the
Egyptian democracy movement or Tunisia?

Mr. ZAKARIA: Yeah, I know several of them in Egypt, not really so many in
Tunisia. But I know many of the people in Egypt. They call themselves student
revolutionaries, but the thing to understand is almost none of them are
actually students.

They were students in 2004, 2005, when they began their efforts, but at this
point, they're all mostly - I think what one would call them, honestly, is
yuppies. They're all sort of young urban professionals for the most part.

GROSS: So what's it been like for you to watch them become activists?

Mr. ZAKARIA: You know, I just - I have to say you are - I've been just struck
with awe, because these are people who are just like us. They're just ordinary
people. They're young, educated people who want - wanted a good job, decent
living. They're not highly political but found themselves in a situation where
they had to become political for the sake of their country.

And that made them more political, and it made them do things that risked their
lives. And now after having achieved this extraordinary revolution, they are
still very focused on trying to make sure that the revolution is consolidated,
that the gains are actually achieved, that the military does give up power,
that the Islamic parties don't come in and throttle liberties.

You know, they're very focused people. I was struck by how they've been calling
for new protests when they felt that the military wasn't really yielding power
in the way that they thought it needed to. And that has had an effect.

So it's easy to be hot-headed and revolutionary and brave. It's not easy, but
it's understandable. But to be brave and be able to achieve these things on the
ground, but then also very thoughtful about recognizing that this is a marathon
not a sprint, it's really unusual, and one would hope that, placed in similar
circumstances, we would all behave like that.

GROSS: What do you think the chances are of Islamic extremists getting more
power in Egypt?

Mr. ZAKARIA: I think the chances of them getting more power in Egypt is very
high. I think the chances of them getting total power in Egypt is low. Look,
Islam is a very powerful political force in the Arab world, partly because it
has been - because the countries were so repressive that it was the only
alternative narrative to the narrative of dictatorship.

And so Islam is going to take a space - political Islam. You cannot avoid that.
The question is going to be two-fold. One, can it really dominate the society?
And I think in Egypt that's difficult.

In Egypt, you have doctors and lawyers and civil servants. You have a middle
class. You have Coptic Christians, who make up 10 percent of the population.
You have Nubians, who make up five percent of the population. So in other
words, there are lots of people interested in individual rights, minority
rights, secularism of some kind or the other. You have the army. So I don't
think they can really dominate.

And I think that the second question then is: Will they be able to in some way
illicitly capture power, you know, somehow through some manipulation of the
system? And I don't really see that, either. But society will have to
accommodate itself to the fact that there's going to be a larger role for
Islam, and the West will have to accommodate itself.

I think we have to be careful to draw the right lines. If these societies
choose to be more socially conservative than we would like, if they choose to
treat women in education in a way that we don't think is right, that's one
thing. Those are a set of poor choices. We wouldn't make them. But that's
different from organizing violence against the West, against Americans.

GROSS: If you're just joining us, my guest is Fareed Zakaria. He hosts the show
"Fareed Zakaria GPS" Sundays on CNN. He's a columnist for Time magazine and the
author of the book "The Post American World," which he's just published in a
new updated and expanded edition.

In your book, you say we're living through the great power shift of the modern
era, and you say this book isn't about the decline of America but rather about
the rise of everyone else, the rise of the rest. What do you mean by that?

Mr. ZAKARIA: If you look at the world in 1979, the number of countries that
were growing at three percent a year, which is generally considered robust
growth, was about 32 or 33, and that reflected the reality that the countries
that were doing well in the world were a handful of countries in the North
Atlantic - the United States, Canada, Western Europe, a few countries in Asia,
Taiwan, South Korea.

The rest of the world was locked out of the global system, largely through bad
economic policies, because of the Cold War, all kinds of things.

If you look at that world today, the number of countries growing at three
percent a year is about 90. Before the financial crash, it was 124. The sea
change that has taken place has been the collapse of communism, the collapse of
the Soviet empire, and the joining of countries from all over the world, from
Latin America, from Asia, into this one global market system.

And the result is that you have countries all over the world thriving, taking
advantage of the political civility that they have achieved, the economic
connection into this global market, the technological connection into this
market, and we are all witnessing this phenomenon.

And it's not - the mistake people sometimes make is to think of it as just
China or just China and India. It's happening in Latin America. It's happening
– there's about 30 countries in Africa that are growing at three percent a
year.

And so what I tried to capture in the book is this new world being shaped for
the first time by everyone, by countries all over the world that have always
been objects of great power politics, you know, colonies, exploited, victimized
countries, and are now participating in a new global system.

GROSS: So as a result, what are some of the areas in which the U.S. used to be
number one that we aren't anymore?

Mr. ZAKARIA: I've looked through a kind of funny little list which, you know,
doesn't tell you everything but is emblematic. You know, the tallest building
in the world is now in Dubai. The biggest factory in the world is in China. Of
course, the biggest 50 factories in the world are in China. The largest oil
refinery in the world is in India. The largest investment fund in the world is
in Abu Dhabi. And the largest Ferris wheel in the world is in Singapore.

And needless to say, 25 years ago, almost every one of those categories was
dominated by the United States. Now more troublingly, we are also losing our
grip on some key indices such as patent creation, scientific publications and
things like that, which are really harbingers of future economic growth.

And that - in the area for example citations, the number of journals -
scientific journals you produce and that are cited - the United States has had
the lead, has been the number one country in the world since the 1930s. We
overtook Germany in the 1930s. I think, in three years, China will overtake the
United States, and that is hugely important in terms of the generation of
scientific knowledge, technological advancement and therefore your ability to
dominate those industries.

GROSS: And you say China is expected to outpace us in the number of patents it
files.

Mr. ZAKARIA: That's right. The number of patents one produces is again one of
these bellwethers of future economic growth: How many ideas are you producing
in the realm of industrial applications, chemical products, pharmaceutical
drugs?

And again, the United States has absolutely dominated this field for almost a
century. The fact that China is even close tells you that this is not just
about copying Western ideas or about cheap labor. This is about a country that
is moving up the value chain, as they say, producing more and more complex
products and is determined to actually become a scientific leader and
innovator.

GROSS: If you're just joining us, my guest is Fareed Zakaria, and he's the host
of "Fareed Zakaria GPS" Sundays on CNN. He's a columnist for Time magazine, and
he has a new updated and revised edition of his book "The Post American World."
Let's take a short break here, and then we'll talk some more. This is FRESH
AIR.

(Soundbite of music)

GROSS: If you're just joining us, my guest is Fareed Zakaria. He's the author
of the book "The Post American World," and he's just released a new revised and
updated edition, which is called "The Post American World," and he also hosts
the program "Fareed Zakaria GPS" on CNN and is a columnist for Time magazine.

GROSS: Now you say we're moving toward a post-American world, and as other
countries grow, America's share of the pie will be smaller. What do you mean by
that?

Mr. ZAKARIA: In economic terms, the rise of the rest is a complete win-win. The
more countries that get rich, the larger the world economy, the more people
there are producing, consuming, investing, saving, the more people we can sell
to, the more people who can loan us money.

If you think about this financial crisis, without the centers of wealth around
the world, we would not have had all the cash that came in to save American
banks, even before the federal government infused money, money from China, from
Singapore, from the Middle East.

This is - we're talking about tens of billions of dollars. We would not have
anywhere near the level of economic growth we have today if not for the fact
that there were people in China and India and Brazil and all over the world who
are still growing quite fast.

GROSS: And who are buying our bonds, like China.

Mr. ZAKARIA: And who are buying - they're buying up bonds. They're buying up
goods. They're buying, you know, all kinds of things, and they're investing in
our stock market. They're investing in our - in all kinds of American
instruments.

Now politically, however, this is not a win-win because politics and power is a
realm of relative influence. So as China expands its role in Asia, it's
influence in Asia, whose role is diminishing? Of course, the established power:
the United States. As China expands its role in Africa, whose role is
diminishing? The United States. It's not possible for two countries to be the
leading dominant political power in Africa at the same time.

So there you are beginning to see that age-old geopolitical contest begin
around the world and principally between China and the United States. But even
there, this is a world that is broader and more complex than that.

GROSS: What you're also seeing now, is Greece just having passed austerity
measures because its economy was collapsing, and they were about to go into
default. So this austerity measure was required before the EU would agree to
bail them out. So now Greece is going to get bailed out by the EU and the IMF,
the International Monetary Fund.

There were really angry protests in the streets. Police were pepper-spraying
the crowds. So, you know, you're talking about the world being, like, more
prosperous and everything, but the world - parts of the world are also on the
verge of financial collapse, including, maybe, the United States.

There's the whole question now about whether we'll raise the debt ceiling, and
there's a lot of opposition to that within Congress. There's grave economic
crises at the same time as the prosperity you're talking about.

Mr. ZAKARIA: Well, look, we're dealing with the hangover from a very big party,
and Greece is dealing with a hangover from a binge of borrowing it did, using
the fact that it was part of the euro so that it could borrow at German
interest rates. It was able to borrow very cheaply.

But here's the important thing to remember. Even there, the real story is about
the increasing integration of the world. Greece has - Greece is a basket case,
has always been a basket case.

Ken Rogaff did a study in which he found that Greece has been in default for 50
percent of the last 220 years. The difference now is that the Germans are going
to bail them out. That's the difference is that Greece has become integrated
into Europe, and so the Europeans are saying we will write you checks, but in
return for those checks, we need you to mend your ways.

I think that that's largely a story of other countries coming to rescue a
troubled country. Greece, you know, there have been lots of defaults in the
history of capitalism, and there have been lots of booms and busts.

Now to your other point, which is a very important one, you know, people keep
talking about how we're next. There is a fundamental difference between America
and Greece. Greece is a basket case economy. It's not a competitive economy. It
doesn't produce much that the world wants to buy. It doesn't export much. It
has a small population. It has, as I said, routinely defaulted on its debt.

The United States is still, by most measures, one of the world's most dynamic
economies, one of the most competitive economies in the world. We have the
leading companies and the leading sectors in the advanced industrial world. We
have an incredibly dynamic society. We have high levels of entrepreneurship. We
have the best universities in the world.

So in other words, we are an economic dynamo. We also have impeccable credit.
In the history of the United States, we have never defaulted. What we don't
have is a political system that can take the very simple measures to deal with
our short-term deficit problem.

To put it in perspective, if Congress were to do nothing, which is something it
does so well, the Bush tax cuts would expire next year, right. That by itself,
the expiration of the Bush tax cuts, would yield $3.9 trillion to the federal
government over the next 10 years.

We would go to the bottom of the pack in terms of deficit as a percentage of
GDP among the rich countries in the world. We would basically solve our fiscal
problems short-term. We have a longer term health care issue, but we would
solve our fiscal problems literally if Congress did nothing.

That's very different from Greece. Greece has no answer to its problems. It
cannot possibly pay back its money.

GROSS: If you were running for office, do you think you would even be able to
say what you say in the book, which is that we're moving toward a post-American
world, and this period is about the rise of the rest?

Mr. ZAKARIA: That's a very good question. It is an awkward thing to say if you
are running for office in the United States because, you know, the nature of a
campaign tends to be about how the United States is number one, rah, rah, rah.

But you can't fight facts. The fact of the matter is that by almost every
measure, other countries are moving up, and they're moving up into space that
used to be dominated by the United States and the Western world. So I don't
know how you can fight those facts. They are very awkward, and it's very
difficult to have to accept that we are going to have to share power.

Sometimes the way I like to put it, is we have to remember that the United
States has been a beacon of hope and liberty. It has been an incredibly
prosperous and vibrant society for many, many decades before 1945.

You know, we were not always the absolute supreme power in the world, and we
were still an unusual, distinctive, wonderful country. I'm not predicting that
we're going to go all the way back to that, but I think it's important to
understand that the nature of America, our DNA as a society is not bound up
with being a world empire.

GROSS: My guest, Fareed Zakaria, will be back in the second half of the show.
He's updated and expanded his bestselling book "The Post American World."
Zakaria is a columnist for Time magazine and hosts the CNN Sunday program
"Fareed Zakaria GPS." I'm Terry Gross, and this is FRESH AIR.

(Soundbite of music)

GROSS: This is FRESH AIR. I’m Terry Gross, back with Fareed Zakaria. He's a
columnist for Time magazine and hosts the CNN Sunday program "Fareed Zakaria
GPS." He's published an updated and expanded version of his book "The Post-
American World." When we left off, we were talking about the debate over
whether to raise the debt ceiling.

So getting back to raising the debt ceiling, if the U.S. does not raise its
debt ceiling, if we end up defaulting on debts, what impact do you think that
would have on the U.S. and the global economy?

Mr. ZAKARIA: I tend to think it would be catastrophic. And I think that, more
importantly, there is a high enough risk here that this is surely a game we
don't want to play. But have we've learned over the last three years, whether
you look at Lehman Brothers and the effect that that collapse had on the world
economy. It's that there are these kinds of things that economists call low-
probability, high-impact events that you don't want to test. You don't want to
see whether this is one of those things that is an unlikely situation, but once
it happens could have a huge seismic global effect, because then the cost of
dealing with that - the after-effects is just cataclysmic.

I think it would be huge. The United States has never defaulted on its debt. It
is the leading country in the world. It has the reserve currency of the world
and I think it is madness for us to be doing this when Congress is, in effect,
already mandated that we borrow more money. This is what I don't understand. By
choosing to spend money at a certain level and setting tax revenues at another
level, a lower level, what Congress has implied is we're going to have to
borrow the difference, right? So raising the debt ceiling is the logical
consequence of Congress's decision to spend a certain amount of money and to
tax at a lower level. How can you have second thoughts about this when you,
Congress, was the one that set these levels in the first place? And besides
which, it's unconstitutional.

The 14th Amendment very clearly says the validity of America's credit and its
debts cannot be questioned. I don't have the exact phrase, but it's about as
clear as you can get. And so for people who believe in the Constitution, it is
to me, beyond bizarre that they're doing this. And I think that President Obama
should if he is forced to assert that what Congress is doing is
unconstitutional and simply use his a consecutive authority to do what he needs
to, to make sure that the United States makes good on its debts.

GROSS: A lot of people in America are saying this fight in Congress, it's just
brinkmanship, it's just politics, they’ll definitely raise the debt ceiling
because they have to.

Now you have contacts around the world. So when you talk to your financial
contacts and political contacts in different countries, countries that would be
affected if we began to default on our debts, are they thinking oh, this is
just politics, this is just brinkmanship, they'll eventually raise the debt
ceiling because they have to? Or are they really scared?

Mr. ZAKARIA: I would say, as you can imagine, it varies. I was in Moscow three
days ago and on a panel discussion, a very senior Russian official said we
think that the United States will come to its senses and do the right thing and
raise the debt ceiling. And then he gulped and he said: in any case, the
consequences of thinking otherwise are too grave to even consider. In other
words, people are hoping that the United States will come to its senses, but
certainly, this has been one more event that is eroding America's political
legitimacy and power.

You know, power is a very intangible thing. A lot of it is perception. And if
there is a perception that the American political system is completely
paralyzed over what most people around the world see as a bizarre debate.
Because with the gap we have, there's simply no way you could close it without
doing both a tax increases and spending cuts. And that therefore, you know, it
seems to everyone the obvious answer is to have a compromise. And that we
cannot even achieve that simple compromise is strange. You know, the worrying
thing here is we are approaching a debate that it's really about money, in a
theological manner - as though there is simply no way to bridge these
differences. But this is not theology. This is not something, you know, where a
Muslim is talking to a Christian about the definition of hell. This is about
money. You literally can split the difference and that's what compromise is.

GROSS: Spell out a little bit more what the catastrophe would be like if we
defaulted on our debt.

Mr. ZAKARIA: If the world worried that the United States was losing the
political capacity to deal with its balance sheet, its fiscal issues, its tax
and revenue polices they would ask for more money to lend us money. In other
words, they would want higher interest rates to lend us money. Now to
understand what that would mean, if you would were to have a doubling of
interest rates in the United States - which is not an unimaginable scenario,
only a few years ago interest rates were about twice what they are now - that
would be, I think, $500 billion a year more. In other words, that would be a
huge cost to the American system. The deficit would explode. It would mean that
you would have no ability to spend any more money, it would be crippling. We
would go from a budget deficit that's nine percent of GDP to 15 percent if GDP.
So this is a huge, huge danger. And for us to be playing, at a time when we are
all concerned about the long-run fiscal health of the United States, is, to me,
bizarre. And as I say, you know, it's so easily solvable.

If you were to enact Simpson-Bowles, the deficit reduction plan that that
commission, that bipartisan commission put together, in 10 years the United
States budget deficit goes from nine percent of GDP today, to 2.2 percent of
GDP, which I think would make it the second lowest of the major economies in
the world. We would solve our problems. And that plan is eminently sensible,
you know, it is a mix of spending cuts and tax increases. Most of the tax
increases are done by closing loopholes. It doesn't raise rates. In fact, it
lowers the corporate income tax rate. And yet, we can't get behind something
that sensible.

GROSS: So in talking about conservative opposition to raising taxes, Grover
Norquist, who's the head of Americans for Tax Reform, which is a group that
believes no tax is good. He gets many Republicans to sign a pledge that they
won't raise taxes, any kind of tax. And a lot of Republicans have signed on to
that. Is that an example of what you’re describing as a theological kind of
debate, as opposed to a political debate of compromise?

Mr. ZAKARIA: Exactly. Because the truth of the matter is we tax at about 18
percent of GDP. We're spending at 23 percent of GDP. There's simply no way you
can close that gap entirely with spending cuts. And the worst and most damaging
thing that has happened in the last few weeks is that Grover Norquist has
decreed - it's almost like Vatican pronouncements - that even the closing of
tax loopholes cannot be abided, because closing a loophole is technically
raising taxes.

So that stupid loopholes, that are really institutionalized corruption, that
have been made in the tax code to favor certain industries or favor certain
interest groups in return for campaign contributions - we can't even close
those because he says that's technically raising taxes on someone and
Republicans have signed a pledge that they will raise taxes on no one. So
you’ve lost the one kind of easy mechanism that the Simpson-Bowles commission
found to raise revenues without raising general rates. And as I say, it leaves
you with the feeling that the system has now become, essentially, paralyzed.

And, you know, this Republican dogma about taxes is one piece - one very
important piece of it because you simply don’t, you know, this is not really
about politics at this point, you know, political ideology. The math doesn’t
work. You simply cannot get to closing a deficit and a debt of the nature we
have without some additional revenues.

GROSS: How do American tax rates compare to comparable countries?

Mr. ZAKARIA: Well, there are two ways you could think about American tax rates.
You know, I hear a lot of people say we are overtaxed. Now this can be a
statement in the abstract. To be overtaxed means one of two things: we are
overtaxed compared with American history, or we are overtaxed compared with
other countries. We are I think; we are the second lowest tax burden of the
major advanced industrial economies. I think Japan is lower. We are the second.
Every other advanced economy - Germany, France, Britain, all the northern
European countries - all of them have higher tax rates than we do. Federal
taxes as a percentage of our GDP in America are at their lowest point since
1950. In other words, compared with our own history, we have extraordinarily
low tax rates.

If you look at job creation, by the way in terms of, you know, is the current
tax structure helping or hindering jobs? Well, the thing you’re struck by is
the American economy created jobs like gangbusters in the 1950s and '60s, when
the top marginal tax rate was in the 70 percent range. The weakest period of
job creation in the United States over the last decades has been the George W.
Bush presidency, 2000 to 2008 when, of course, tax rates have been at their
lowest. So it's just - there's no real empirical evidence that would suggest
that by themselves tax rates are the only thing that determines job growth one
way or the other.

GROSS: If you’re just joining us, my guest is Fareed Zakaria and he's the host
of "Fareed Zakaria GPS" Sundays on CNN. He's a columnist for Time magazine. And
he has a new updated and revised edition of his book "The Post-American World."

Let's take a short break here and then we'll talk some more.

This is FRESH AIR.

(Soundbite of music)

GROSS: If you’re just joining us, my guest is Fareed Zakaria. He's the author
of the book "The Post-American World" and he's just released a new revised and
updated edition, which is called "The Post-American World (Release 2.0)," and
he also hosts the program "Fareed Zakaria GPS" on CNN and is a columnist for
Time magazine.

One of the questions you raise in your book and that you’ve recently discussed
on your CNN program is what role should the government play, if any, in helping
business and science innovate? So here in the United States there's a lot of
opposition to government funding for, you know, for research projects and for
education projects now. And part of that is the debt problem and part of it is
just more of a, you know, ideological issue. So let me ask you how you think we
compare, as a country, to other countries in terms of government helping create
innovation?

Mr. ZAKARIA: Well, you know, it is funny. We have this debate in America that
is almost a theoretical debate about the role of government, the proper role of
government in the economy and whether, you know, government should be involved
and how distorting it would be if it were. And I worry that while we are having
this theoretical debate, on the other side of the globe the Chinese government
is vigorously promoting industry after industry. The German government is
vigorously promoting its manufacturing sector, the South Korean government is
vigorously promoting its manufacturing sector - and that by the time we've
resolved our debate, there won't be any industries left to compete in. In point
of fact, it is absolutely clear that government plays a key role in - as a
catalyst, more than as a producer of any kind - but as a catalyst in promoting
long-run growth.

And it does this in two ways. The first is by funding basic science and
technology, research and, you know, you do that in a variety of ways. And the
second is by providing some industries with some early help while their
products are, as economists would say, going down the cost curve. That is to
say when you start stuff off - you look at solar energy today, it's very
expensive to make. And then somebody needs to buy the product or subsidize it
while the cost comes down. Now the odd thing is, of course, this is the history
of America's technological ingenuity and advancement.

If you look at when we had dominated the world it was the '50s, '60s, '70s,
'80s. What were we doing in that period? Well, the U.S. government was
massively subsidizing research and technology. We were building this huge state
university system. We were setting up the NIH, the NSF, all these institutes
that spent billions and billions of dollars on scientific research and
technology. The second thing that was happening is that the U.S. government was
buying massive quantities of new industrial and electronic products.

The computer chip for example. The U.S. government was the only buyer of
computer chips for 10 years while the cost declined. NASA was the only buyer of
large computers. Then you have, of course, the case of something like the
Internet, which was developed by the Defense Department at a time when the
commercial industries looked at the project and said it was commercially not
viable. So if we were to look at our own history we would recognize the
powerful role that government has played.

Now look, when the government gets involved there's danger. Some money, a lot
of money maybe gets wasted, some of the decisions are badly made, but this is
true in the private sector as well. But the key is that in the long run you
find very few countries that have had sustained GDP growth, technological
progress and advancement that have dominated the advanced industrial world,
without some crucial role being played by government.

GROSS: You travel around the world a lot, so what are some of the things you
see in the infrastructure of other countries that you wish we had here? Our
infrastructure was so innovative when it was designed, and so much of it is old
now - whether it's sewers, trains, roads that are cracked, the electricity
grid. And this isn't true in every city and every suburb, but in many cities
and many suburbs. So what are some of the things you see in other countries
that you think we’ve fallen behind on, in terms of infrastructure and
transportation?

Mr. ZAKARIA: Probably the most important place we're falling behind, and it is
absolutely vital that we catch up, is digital and energy infrastructure. You
know, we like to think we're the most advanced country in the world that has,
you know, we're at the cutting edge, we're inventing the future. People would
be surprised to know that in terms of Internet speed, connectivity, cell phone
usage, we're actually the middle of the pack, in some cases towards the bottom
of the pack, in terms if the pack is defined as the advanced industrial
countries. France has stronger Internet connectivity than we do. They have much
stronger broadband coverage. Therefore they are able to do video on WiFi, for
example, in a much more sophisticated way than we can. This is going to be the
economy of the future.

Similarly, in energy, the most important thing that we can do easily - easily
but expensively - would be to build a genuine energy electricity grid, so that
energy could be distributed efficiently around the country. And then you can
produce it in 100 different ways. Because I think everyone understands that
there is no one silver bullet that will answer the energy problem. And again
there, we are not doing nearly as well as we need to.

We all know about the roads and bridges. If you travel now, really, to any of
the advanced economies, what you’re struck by is just how terrible American
infrastructure is. And if you talk to economists who study this, they will tell
you this is a huge cost to American business - that the cost of traffic in
California materially affects California's economic growth and its GDP. That
the cost of, you know, the poor train system in the Northeast, materially
affects our ability to be competitive on the world stage. But, you know, it's
very difficult again. People say well, Amtrak loses money. Well, the highways
lose money too. You know, trains nowhere in the world make money if you look at
them by themselves. What you have to look at them in terms of is the broader
function they fulfill in facilitating interstate commerce and international
commerce. And that's the only metric by which you can judge airports, highways
or trains. And yet we seem to be stuck again in this sort of theoretical debate
and we're not noticing that meanwhile the rest of the world is building, well,
world-class infrastructure.

GROSS: Are you worried that it's just going to get harder and harder to catch
up, the more the infrastructure decays?

Mr. ZAKARIA: You know, I worry more about education than infrastructure,
because infrastructure you can build. It's really just money and bricks and
mortar. In the case of digital, it's making a few sensible decision in terms of
what standards we use. The thing that worries me the most is our education. We
are simply turning out a workforce that cannot compete because we're not going
to have the old manufacturing jobs that we used to. We are going to need people
to be engage in knowledge industries, and they're going to have to produce
things in knowledge industries.

If you look at Germany, it's a fascinating role model. The Germans have
maintained their manufacturing edge, despite being a high-tax, high-regulation
economy. Why? Because the government really set about ensuring that it
maintained funding for technical training, technical advancements,
apprenticeship programs. It made a concerted effort to retain high-end, complex
manufacturing, you know, the kind of BMW model, if you will. And they've done
that so successfully that Germany, which has a quarter of America's population,
exports more than America does. Think about that. We have four times the
population of Germany and we don't export as much as they do. Again, it might
be worth taking a look at that country and asking what are they doing right?

GROSS: My guest is Fareed Zakaria. He's updated and expanded his bestseller,
"The Post-American World."

We'll talk more after a break.

This is FRESH AIR.

(Soundbite of music)

GROSS: If you’re just joining us, my guest is Fareed Zakaria. He's the hosts
"Fareed Zakaria GPS" on CNN on Sundays. He writes a column for Time magazine.
And his book "The Post-American World" has just been updated and expanded in a
new edition.

You grew up in India, and you came to the U.S. in 1982 to go to college. You're
now an American citizen. You've been watching the anti-immigration movement in
the U.S. grow and opposition to the Dream Act. The Dream Act would make
children who were born here, citizens. So I'm just interested in your general
reaction to the anti-immigration movement.

Mr. ZAKARIA: You know, the America I came to in 1982 was a much more open,
tolerant place. I know it sounds odd, because I mean by many yardsticks we've
made enormous progress and that's real - gay marriage for example. But there
was a spirit in the air that was much more accommodating, particularly of
immigrants. Ronald Reagan used to have a wonderful line where he said Americans
don't care what your origins are, they care what your destination is. And I
really felt that was true of the America I came to. I think it is less true
now. I think there is a certain kind of closing of the American spirit. And
here's the tragedy, if you look at one of the absolute crucial strengths the
United States has going forward, it is immigration. Why do I say that? If you
look at every industrialized country in the world, we all have the same
problems. We’ve got a welfare state. We've got too many people who are going to
get old. We have health care costs rising. And, you know, those are things you
can fix. They're difficult, but you can fix them. The one thing you cannot fix,
you cannot change really is demographics. Every rich country in the world is
going to have fewer and fewer people.

The problem that Japan has, which is so much part of its 20-year decline, is
that it is simply losing people. Italy would be next. Germany will be after
that. One big exception: the United States. We are the only industrialized
country in the world, the only rich country that will actually gain in people.
By 2050 the United States will have 400 million people, which is why you talk
to any CEO who understands these trends and they will tell you America remains
a powerful, powerful economic dynamo because it's going to have more young
workers who are entrepreneurs, inventors, producers and taxpayers. So that
means that the United States is going to be vibrant, economically,
demographically - and this is all because of immigration.

The only difference between us and all these other rich countries is that we
take in, legally, every year, more people than the rest of the world put
together. And this is our extraordinary advantage. We take them in. We
assimilate them. We know how to do it. We're the envy of the world with regard
to this stuff, and yet, what we are doing is we are now trying to copy the
immigration practices of France and Germany which have utterly failed to
assimilate their populations. We are adopting this churlish, hostile attitude
towards immigrants.

GROSS: Last year you gave back an award that you had received a few years
earlier. You had received award from the Anti-Defamation League for - it was
the Hubert Humphrey First Amendment Freedoms Prize - and you gave it back when
that group stated their opposition to Park 51, the Islamic cultural center and
mosque that was planned for near the World Trade Center, near Ground Zero. Was
that a hard decision?

Mr. ZAKARIA: It was a hard decision because I really admire the ADL. I admire
the Anti-Defamation League. I think that what they have done for decades and
decades has been incredibly exemplary work, not just on behalf of American Jews
and in the cause of anti anti-Semitism, which is important, but they have often
stood up for other groups. And that was why I was stunned that they would take
on an issue like this one - where an entirely manufactured opposition to this
Islamic cultural center had been created. We are constantly talking about how
we should be supporting moderate Muslims. Well, this group of people was about
as moderate as you get.

They wanted to build an Islamic Center with a mosque that would also have
separate prayer space for Jews and Christians, that would have a board with
Jews and Christians on it. I mean you find me a Christian church that has
Muslims on its board. And so the effort here was entirely to try to build
bridges between the Islamic community, the Muslim community and other
communities. The location was really, from everything one can tell, a total
happenstance. They were looking for a place. Nobody focused on where it was,
the fact that it was three or four blocks from the World Trade Center site. And
in fact, many conservatives applauded it at the time, for all these
characteristics.

You know, George Bush - the administration of George W. Bush used to look
around for projects like this around the world to support. I mean if this
project has been happening in some foreign country, the chances are that the
United States government would actually be funding it. And so in that context,
for the Anti-Defamation League to weigh in on something like this on the wrong
side, struck me as a terrible tragedy. I did it largely because I wanted to
send them a signal, that I expected more of them. I think we all expected more
of them.

It's understandable that right wing, you know, radio hosts and talk shows will
use this. They're in the business of generating - manufacturing outrage. I mean
every day they're trying to scare people about something. But that's not the
ADL's business and it shouldn't be the ADL's business. It has a much higher
calling. And I am confident that in the long run, the ADL will return to its
roots.

GROSS: Fareed Zakaria, thank you so much for talking with us.

Mr. ZAKARIA: This is an honor and a pleasure.

GROSS: Fareed Zakaria is editor-at-large of Time magazine and hosts CNN's
Sunday program "Fareed Zakaria GPS." He's updated and expanded his bestseller
"The Post-American World." You can read an excerpt on our Website,
freshair.npr.org.

(Soundbite of music)

I'm Terry Gross.
..COST:
$00.00
..INDX:
137522219

Transcripts are created on a rush deadline, and accuracy and availability may vary. This text may not be in its final form and may be updated or revised in the future. Please be aware that the authoritative record of Fresh Air interviews and reviews are the audio recordings of each segment.

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