#94 The Revenge of Power: How Power is Shifting in the 21st Century with Moises Naim

What is discussed, and when

1. 0:00 – 5:00: Moises Naim, Revenge of Power, The End of Power
2. 10:00 – 15:00: The End of Power, Revenge of Power
3. 15:00 – 20:00: Edelman
4. 20:00 – 25:00: Revenge of Power

Notable quotes from "#94 The Revenge of Power: How Power is Shifting in the 21st Century with Moises Naim"

• Tomman hi everyone it's Lyn toen welcome to another episode today I'm excited to be with Moises Naim contrary to widespread perception of power becoming more concentrated and…

  about Moises Naim · at 0:23

• Venezuela and editor-in chief of foreign policy magazine he's also written two books the end of power and revenge of power both of which are excellent welcome noises and thanks…

  about Revenge of Power · at 1:10

• Studying that the most notable no well-known study and survey on that is by a company called Edelman that has the trust barometer and the trust barometer shows that every year…

  about Edelman · at 18:27

Who and what is mentioned in this episode?

People

• Lynn Thomas — Person · 2 mentions
• Moises Naim — Person · 1 mention · first at 0:29

Books & papers

• Revenge of Power — Book · 3 mentions · first at 1:16
• The End of Power — Book · 3 mentions · first at 1:16
  Venezuela and editor-in chief of foreign policy magazine he's also written two books the end of power and revenge of power both of which are excellent welcome noises and thanks…

Companies & orgs

• Edelman — Company · 1 mention · first at 18:32

Full transcript with timestamps

0:00 welcome to the three takeaways podcast which features short memorable conversations with the world's best thinkers Business Leaders writers politicians scientists and other newsmakers each episode ends with the three key takeaways that person has learned over their lives and their careers and now your host and board member of schools at Harvard Princeton and Columbia Lynn tomman hi everyone it's Lyn toen welcome to another episode today I'm excited to be with Moises Naim contrary to widespread perception of power becoming more concentrated and those who have it becoming stronger than ever before Moises believes that power is becoming more frail and more vulnerable that it's become easier to get harder to use and easier to lose the transformation of power has upended government with the election of leaders such as Donald Trump in the US and Hugo Chavez in Venezuela and it is similarly re business the Arts

1:01 and religion I'm looking forward to finding out more noises is a scholar and a journalist he was minister of development for his home country of Venezuela and editor-in chief of foreign policy magazine he's also written two books the end of power and revenge of power both of which are excellent welcome noises and thanks so much for our conversation today thank you I'm delighted to be chatting with you and I am delighted to be chatting with you too how did you first become interested in power when I have power as you mentioned I was a member of the economic cabinet of my country I was a minister of Industry trade development and he I was always surprised by the gap between what people thought I could do and the power I had and what I did have in reality in reality was very constrained it was limited I did not have sources to match their responsibilities politics would interfere and water down and distort

2:06 policies and I at the time thought it was me I was a very young 36y old unexperienced young professional that all of a sudden became the minister of the economy and so I said no this is just happening to me and then after working government I went to the World Bank where part of my job was to talk to ministers from around the world and I discovered that the same experience that I had with it was a global thing it was not just me and my incompetence and my youth and my inexperience it was that the nature of power is very restricted in many ways I'm not naive I'm not suggesting that people like Jing ping in China or even Vladimir Putin now or the president of the United States or the pope don't have power all I'm saying is that very often that power is more curtailed and restricted and limited and then I made my business talking to heads of states and talking about their power and it's the same thing power was

3:07 becoming more more fragmented and Emeral it used to be that power was equated with the size of organizations can you tell us about that yeah the size of organization and owning physical assets Lyn right you need land and buildings and machinery and trucks and things like that well they digital economy appeared and instead of having the material concrete tangible assets you had digital assets and intellectual property and patents and everything having to do with Innovation became a much bigger part of the balance sheets of companies I love your example of the chess Grand Masters can you tell us about them that's a fantastic concrete and surprising examples of power and historically it was the sport at the highest levels I'm not talking about amateurs playing chess you know but Chess at the work class a grandm level oh had a structure and that structure was dominated by Russia by Eastern Europe in recent years that changed it

4:17 was appended and new players from in proba places came even women started challenging the grand Masters in women that have been marginalized or couldn't compete started competing and winning and becoming Chess Masters on their own and so I use that metaphor and I trace what happen why did that happen why did the barriers to entry to becoming a chess grandmas happen and it illustrates what happened in a lot of other places in which newcomers that I call Micro Powers came and challenged established players using a different Playbook approaching strategy with a different perspective taking into account new realities and of course using the new opportunities created by the internet you've identified many shifts of power that you've seen can you tell us about the shift from Brawn to brains yes and as I said before power was Associated for example with owning large tracks of land now you would

5:22 rather own a microchip that contains a lot of information and so big and strong and physic was important now you want brainy you want Innovation you want an attitude towards exploring the unknown running risks that others would not run being comfortable with a non-tangible reality of these assets you've also seen a shift in power from north to south can you tell us about that in a variety of ways you have seen new countries coming on the world stage that are quite amazing the obvious example is China in the last decade China's economy went from $6 trillion dollar to now 14 15 so a huge expansion of the Chinese economy and a lot of that of course the source was human capital you know workers but it also had a very strong dimension of technology that was not often created in China but taken and sometimes stolen from others in the world so that's an example of a new that became a player in very

6:32 unprecedented ways we have seen the list of the wealthiest people in the world published by Fortune of fores now includes more billionaires from the developing World from India China all the places that ever before in a lot of competitive who would have said for example that anhauser bush a very important American brand a very important American company is now owned by foreigners not Americans that would be a surprise to a lot of beer drinkers in America so there is all kinds of indications that the concentration of power that belong to the north and to the world's wealthiest countries is now fragmenting and that trend of big no longer dominating also applies to the military I was really surprised yeah and a very sad story of September 11 it cost alqaeda 500 thousand doar to Stage September 11 and the consequences of that have been trillions and we are still suffering the consequences of that and what we're

7:39 seeing Ukraine these days is also a good example you have the armies the military the Armed Forces of one of the largest most powerful nuclear superpowers in the world that are being contained and we don't know how it's going to end but surely the Ukrainian military and the Ukrainian people have offered us a view of how the smaller player is able to either deny the big ones the ability to do whatever they wanted or even displace them in terms of who's going to be calling the shots in that place you talked about the business world how the largest companies used to be the ones with the most resources whether it's manufacturing plants or land and how that's changed to ones now with the most Talent what has changed in terms of the leadership the CEO of the these organizations is there change there too yes perhaps the most most relevant important change for CEOs is that the tenure in office has become shorter and

8:41 shorter the occupational hazard of being a CEO and being fired or having to leave the company is very high every year the length of the tenure of CEO's shortens which is a surprise because at the same time that that happens they're making more money than ever and the co compensation is of course an important visible issue and part of the debate on inequality that is an important debate that is taking place these days so the first thing is that perhaps as a result of my research you discovered that in order to be successful these days you need to be laser targeted and very almost obsessively concentrated on doing well what you're doing you cannot afford to be distracted the problem with that is that it makes you lose peripheral vision your challenges and your opportunities very often will come out from outside your comfort zone from outside the Natural Markets from outside the kind of business that you know so

9:45 well because you need to be very competitive that concentration of attention creates a tunnel vision That clouds the identification of things and opportunities and threats that are coming from around you not from the core of your attention it used to be that the mega players competed only against each other can you explain more how the structure and nature of competition has changed the structure of competition has changed in the nature of competition has changed and we have seen how new challenges newcomers are able to displace established players we have seen that in almost every sector of the economy any business sector in which the world disruption and this Innovative Innovation and disruption disruptive innovation has become part of the Mantra in today's business world so when you look at Finance the competition for the big Banks then is not other big Banks but it's the hedge funds and in the car

10:46 industry the competition for GM and Ford and Toyota is not other big car companies it's Tesla So when you say disruptive innovation you're saying that in every field there are new comers that can easily acquire power when you talk noises about power being more fragile and power decaying what do you mean and why is it so important everybody is starts by explaining that is going to disrupt something or dis intermediate something those are the two main phrases or words being used but then there is a lot of that there are also different dynamics that are generating some of the larger and most capitalized companies in the history of business and those are the technology Giants that reach valuations that we had not seen before and they're concentrating powers in ways that we had not seen before so one of my books is about the end of power ni 10 years later I just published one titled the Revenge

11:50 of power and what happened in those 10 years power has become easier to acquire harder to use easier to lose there is that happening but at the same time and simultaneously there is also concentration of power in some sectors so call it the first is the cuga forces that spread power and the centripedal forces that concentrate power and is the clash of the tool that explains a lot of what's going on in business in politics in geopolitics and so on yeah so that's why you mentioned that the US could be hurt by Al Qaeda similarly in business the competition for the big Bank is not other big Banks but it's the hedge funds the competition for GM and Ford and Toyota is not another big car company it's Tesla so that in every field there are newcomers that can easily acquire power when you say that power is decaying what do you mean and why is that so important there are things that the powerful were used to do that they

12:56 cannot do anymore that they are thing that they are I to them that they took for granted Market power gave companies the opportunity to impose views prices products cycles and everything else that continued to be the case but now they have to navigate Waters that are filled with competitors Regulators stakeholders users employees activists so it's a much more is a world more people by Challengers and forces that constrained the power of the big corporation that doesn't mean that they're not immensely powerful Goldman Sachs and JP Morgan Chase and all that in the banking sector or the technology companies are very large and have a lot of power but they would also be the first to tell you that they also navigate in waters as I just said that limit what they can do so the new players have a power to sty and to block according to my theories they will have limits to that that has been the until now but especially in the the

14:01 internet and social media generically we call the platforms that has been the case but I see all kinds of signals that show that they will have limitations and in some cases I will not be surprised if they are forced to divest and restructure and change the perimeter of their business what you call an aspiration Revolution what is it and why does it matter when I rote the end of power I I explained that power was more Emeral and more often challenged the question is why why is that happened and and I have a long list of factors that are contributing to that I included in three categories that I called Revolution and there's the more revolution in which there is more of everything more countries more people more NOS more terrorist organizations more companies more political parties ideologies currencies choose something that has to do with The Human Experience and there is more of it so that's the more Revolution that

15:01 contributes to what's happening to power but then there is the fact that those things that we have a lot of now are movable and that is the mobility Revolution they move or they're connected or through the internet there is a lot of Mobility not physical but very often digital so the second is the mobility Revolution then the third is the one you're asking which is the mentality Revolution which is a profound change in values perspective aspirations desires of people the University of Michigan has been running now for decades the world values system which essentially surveys the world or a very large part of the human population and tries to understand what are the values what are the expectations and what is quite amazing is it's like they are surveying two different planets the way the aspirations and the hopes and the frustrations and the activism and what they demand of others and the way they

16:01 use power is complet it's like we are talking about two different worlds in just 10 20 years so it's quite something to view the world value system what were the answers they were getting 10 20 years ago and what they're getting today it's completely different people are more tolerant in some aspects more intolerant in others but phras is like you have to do that just because that's the way we have always done it that phrase now doesn't buy you much doesn't have a lot of power to motivate or to run an organization so there are all kinds of changes in values man and the mentality Revolution that is forcing CEOs to rethink the way they deal with all the stakeholders that surround their operation it's really interesting to me that better is now not enough that people look to see what's happening elsewhere so they might immigrate they might move not because of absolute deprivation or absolute opportunity but

17:01 relative deprivation or opportunity to me that's fascinating that is so important L I had a very interesting experience I was visited by a group of European political leaders young they came to Washington and they were a very pessimistic Bunch they were worried about being left behind of a world and of work that is not what people wanted so all kinds of Alan very long list of disappointments regrets frustrations and just by coincidence the following week I had a similar visit by a group of Chinese students and that was one of the most optimistic group of people I have encountered in a long time because they were seeing the changes in the country they of course are aware of the limits and the problems and difficulties and deficiencies that China has and and they are aware that they live in a dictator ship but they are optimistic they think they're going to be much better the future is good for them and so it was

18:05 quite interesting to compare contrast the expectations and perspectives of European leaders and and Chinese students Moises you talk about it generally a decline in trust in institutions globally can you elaborate yeah actually it's not me it is a series of researchers that are studying that the most notable no well-known study and survey on that is by a company called Edelman that has the trust barometer and the trust barometer shows that every year trust is declining people don't trust in business in Bankers don't trust the media don't trust government don't trust they don't trust anyone and so that has huge consequences in terms of how you run a company how you run a government how you run for government and for office and about trust which is indispensable is in short supply these days why do you think there is a decline in trust let me quote a Spanish philosopher that in 1939 his name is Jose Ortega iget a philosopher

19:15 writer he was writing in 1939 about a European turmoil Europe you know he saw coming what the tragedies that then happened in Europe at the time he wrote a book called man and crisis and one of the phrases in that book is we do not know what is happening to us and that is precisely the thing that is happening to us so we all feel that big things are going on climate change artificial intelligence and the pandemics and everything we know big things are happening and we know that they will affect us and our families but we don't know how we don't know where we don't know what we can do to adjust to respond to prepare to 4 if y Us in the face of these huge coming challenges that we don't have a handle on I think that feeds into trust and also trust influences that perspective at the same time what's happened in government that they are having a very hard time being successful it's very hard to succeed in

20:21 government these days expectations are multiple High and the difficulties of fulfilling those expectations of your voters are huge so we are surrounded by what I call the book the Revenge of power which is this feeling we have all met somebody who says everything is bad the politicians that are all Crooks nobody wants works for the well-being of society they're all there to steal and they terrorists they're opportunists nothing is worthwhile in terms of politics so anti-politics is also an important part of all this it's seems like there's increasing fragmentation in politics in many countries around the world and that there's increasing gridlock and there are also people running for office that one would not have expected to run for office and they're very successful getting a very large percentage of support can you talk about that yes these are the threp leaders and new breed of political leaders that use

21:23 their power or attain their power using the threepiece strategies and the threepiece strategies are populism polarization and post truth populism has always existed is often confused as an ideology which is not it is just a bag of tricks a toolkit to acquire government that is based on the division of society in two a varous corrupt Elite that exploits a noble people and therefore they need a Defender a champion that protects the noble people and normally these populists use that construct get and then very often they do not achieve they their promises were empty and were just a trick to get into government but now as you said before polarization is an important part of that it's not just the division between the noble people and the corrupt Elite is now that we have all kinds of identities interests that fragment the political space and where Discord and conflict is the norm and polarization

22:28 everything is polarized just imagine wearing masks for the pandemics became a political issue wearing or not wearing a mask defined you and expectations about who you are and so on and became a matter of political football which is crazy that just shows you the extent to which this identity kind of behavior creates new political realities how do you govern a country in which it is divided in so many fragments of race and gender and religion and partisan politics and all kinds of things that divide and this cord is the norm that is and that's polarization and then there is the third P which is post truth which is creating doubts about what to believe who to believe all the system of lies and half truths trying to confuse people and that is of course Amplified by technology by the social platforms and so you have the post truth that feeds into polarizations that breeds even more and deepens the Divide of populists all

23:39 of that together creates a very nasty political environment and it's Amplified as well to look at their own progress and maybe they feel their progress is not as fast as they would like it to be or they see greater progress possible elsewhere exactly and there is a lot of there are millions of people that are are living lives that have a trajectory and a sort of circumstances that they did not imagine they had a different life in mind and that of course is complicated we are entering l in a very difficult period in which you have a lot of frustrated citizens for good reasons that don't know what it is to live without democracy and therefore are very quick in their writing criticizing dismissing theocracy and they're willing to accept something else like autocracies well that dissatisfaction is about to Boom with the levels of inflation we're going to enter we are already the inflation levels that we

24:40 have not seen in decades we have a whole generation of individuals that have not lived in in inflation those of us who have know how Insidious it is how damaging it is how impoverishing and creates also inequality opens up opportunities for corruption and so inflation has horrible political consequences and that environment in which you have a whole generation of people that don't know inflation and are will now be living with inflation are ready to ignore democracy or just theide it so it's the combination of both is very concerning you also say that broad swaths of the population have been left politically homeless due to polarization how do we fix that well first by recognizing that our democracy is worth protecting that there should be values that are should be above and beyond our most personal identities that the notion of patriotism the notion of being a citizen is more important than

25:45 being part of a group that is tribal in nature so tribalism is something that is with us it's becoming important and we need to fight it Moises before I ask for the three takeway you'd like to leave the audience with today is there anything else you would like to add what should I have asked you that I did not no I think you covered a lot of terrain and thanks for the opportunity but I think you covered everything okay then what are the three takeaways that you'd like to leave the audience with today that democracy is an endangered species in the political ecosystem that democracies that we took for granted are now Under Siege and that there is a global war on checks and balances the erosion and I can give you the numbers which are quite striking in terms of how democracy has had a very bad patch and has been declining in 2011 49% of humanity Liv in autocratic regime in 2020 10 years later that number is 70%

26:50 from 49% to 70% that means that most of the world lives in autocracies of 195 countries only 34 are liberal democracies in 2021 only 15 countries were're moving towards becoming more democratic that's the lowest number of transitions since 1978 so democracy is under siege democracy is undermined and is undermined by a new crop and this is the second takeaway there's a new crop of leaders that I call the 3p leaders that I already described that undermine democracy from within they win elections they become heads of state they acquire power and they immediately start undermining the checks and balances of democracy and of course eliminating term limits in ways that will ensure that they will continue to be in power those are the three p leaders that I talked about the third takeaway is that no problem has ever been solved if it was not first discovered and recognized as such and I believe that that's the case

27:56 with democracy today we are sleepwalking towards autocracy and the world has not understood the level of risk that we are now facing in terms of losing our democracy thank you this has been great I really enjoyed both of your books thank you very much if you enjoyed today's episode and would like to receive the show notes or get new Fresh weekly episodes be sure to sign up for our newsletter at 3 takeaway.com or follow us on Instagram Twitter and Facebook note that 3 takeaway.com is with the number three three is not spelled out see you soon at 3 takeaway.com

Questions about this episode

What is discussed in "#94 The Revenge of Power: How Power is Shifting in the 21st Century with Moises Naim"?

In order: 0:00 Moises Naim, Revenge of Power, The End of Power; 10:00 The End of Power, Revenge of Power; 15:00 Edelman; 20:00 Revenge of Power.

What is mentioned in this 3 Takeaways episode?

5 people, works and ideas are mentioned, including Revenge of Power, The End of Power, Lynn Thomas, Moises Naim, Edelman. Each one on this page links to its own page with every episode that mentions it.

How long is "#94 The Revenge of Power: How Power is Shifting in the 21st Century with Moises Naim"?

The episode runs 29 min; the transcript is about 4,390 words in 27 timestamped sections.

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