[Public Papers of the Presidents of the United States: William J. Clinton (1998, Book II)]
[September 21, 1998]
[Pages 1633-1640]
[From the U.S. Government Publishing Office www.gpo.gov]



Remarks at ``Strengthening Democracy in the Global Economy:
An Opening Dialogue'' in New York City
September 21, 1998

    President Clinton. Thank you very much, John. I would like to thank 
you and the NYU School of Law, the Progressive Policy Institute, the 
World Policy Institute, and the New School University--all of you--for 
your support of this endeavor. And especially, we want to thank NYU Law 
School for hosting this.
    I'd like to thank Hillary and the people on her staff and others who 
worked with you to conceive and execute this remarkable meeting. I want 
to thank all the participants here on the previous panels. I have gotten 
a report about what you've said, and I will try not to be repetitive. I 
would also like to thank Prime Minister Blair, Prime Minister Prodi, 
President Stoyanov for being here and sharing this couple of hours with 
me. I want you to have the maximum amount of time to hear from them.
    If you listened to the people in the earlier panels today, you know 
kind of how this so-

[[Page 1634]]

called Third Way movement evolved, beginning in the 1980's here, in 
Great Britain, and in other places. If you look around the world, there 
is an astonishing emergence in so many countries, and obviously in 
different contexts, of people who are trying to be modern and 
progressive. That is, they're trying to embrace change; they're trying 
to embrace free markets; they're trying to embrace engagement in the 
rest of the world. But they do not reject the notion that we have mutual 
responsibilities to each other, both within and beyond our national 
borders.
    Most of us have very strong views about the role of government. We 
believe that the government should support a pro-growth policy but one 
that is consistent with advancing the environment. And that's the other 
thing I know you've heard before, but there are hard choices to be made 
in life and in politics. But not all choices posed are real.
    One of the things that paralyzes a country is when the rhetoric 
governing the national civic and political debate is composed of false 
choices designed to divide people and win elections but not to advance 
the common good once the elections were over. I think that, more than 
anything else, that feeling that I had many years ago back in the 
eighties got me into trying to rethink this whole notion of what our 
national political principles ought to be, what our driving platform 
ought to be.
    I think that we have found that, yes, there are some very hard 
choices to be made, but some of the mega-choices that people tell us we 
have to make really are false: that you can't have a growing economy by 
pitting working people against business people, you have to get them to 
work together; you can't have a successful economic policy over the long 
run unless you improve the environment, not destroy it.
    It is impossible to, anymore, have a clear division between domestic 
and foreign policy, whether it is economic policy or security policy, 
and I would like to argue, also, social policy. That is, I believe we 
have a vested interest in the United States in advancing the welfare of 
ordinary citizens around the world as we pursue our economic and 
security interests. And of course, that brings us to the subject we came 
to discuss today, which is how to make the global economy work for 
ordinary citizens.
    I would just say, I'd like to make two big points. Number one is, 
the rest of us, no matter how good our conscience or how big out 
pocketbooks, cannot make the global economy work for ordinary citizens 
in any country if the country itself is not doing the right things. And 
I think it's very important to point that out. Second, all the countries 
in the world trying to do the right things won't make sense unless we 
recognize that we have responsibilities, collective responsibilities 
that go beyond our borders, and I would just like to mention a couple of 
them.
    First of all, we have to create a trading system for the 21st 
century that actually works to benefit ordinary people in countries 
throughout the globe. That's what all this labor and environmental 
conditions and letting all the interest groups be a part of the trade 
negotiations--all of that's just sort of shorthand for saying, ``Look, 
we've got to figure out some way that if wealth increases everywhere, 
real people get the benefit of it, and it's fairly spread, and people 
that work hard are rewarded for it.''
    Second, I think we simply have to realize that while the IMF and the 
World Bank and these international institutions have proved remarkably 
flexible and expandable, if you will, over the last 50 years, we are 
living in a world that is really quite different now, with these global 
financial markets and the increasing integration of the economy. And 
while, again I say, in the absence of good domestic policies, there is 
nothing a global system can do to protect people from themselves and 
their own mismanagement, the world financial system today does not guard 
against that boom/bust cycle that all of our national economic policies 
guard against, that it does not reflect the lessons that we learned in 
the aftermath of the Great Depression of 1929 nationally--it does not 
reflect those lessons on an international scale.
    And I believe that the most urgent thing we can do is to find a way 
to keep capital flowing freely so that the market system works around 
the world, but do it in a way that prevents these catastrophic 
developments we've seen in some countries and also may prevent an 
overindulgence of giddiness in some places, where too much money flows 
in in the beginning without any sort of proper risk premium at all on 
it.
    We have to recognize that there's going to be a global financial 
system, and we have to think about how we can deal with it in the

[[Page 1635]]

way each of us deal nationally to avoid depression and to moderate boom/
bust cycles.
    Now, in the short run, I think there are a lot of other things we 
have to do: Europe, the United States, Japan adopting aggressive growth 
strategies; working through some of the bad debts in Asian countries; 
dealing with Russia, especially; preventing the contagion from going to 
Latin America, especially to Brazil. There are lots of other things we 
can do.
    Just one point, finally, I do believe that it is unavoidable that 
trauma will come to some of the countries in the world through the 
workout they have to go through. And therefore, I believe that the 
developed countries, either directly through the G-8 or indirectly 
through the World Bank, should do much, much, much more to build social 
safety nets in countries that we want to be free market democracies, so 
that people who through no fault of their own find themselves destitute 
have a chance to reconstruct their lives and live in dignity in the 
meantime. I think that is quite important that Jim Wolfensohn has 
committed to do that, and I think the rest of us should, as well.
    So in summary, I'm grateful that the Third Way seems to be taking 
hold around the world. I think if you look at the record of the people 
on either side of me, the evidence is that the policies work for 
ordinary citizens and our countries. I think the challenges ahead of us 
are very, very profound. But I think if we meet them we will find that 
this whole approach will work in a global sense in the same way it's 
worked nationally in the nations here represented and in many others 
around the world.
    Thank you very much.

[At this point, Prime Minister Tony Blair of the United Kingdom, Prime 
Minister Romano Prodi of Italy, and President Petar Stoyanov of Bulgaria 
made brief remarks.]

Philosophy of Government

    President Clinton. I would like to start the conversation by asking 
you to think about your jobs, first from a domestic point of view, just 
totally within your country, and then we'll move to our global 
responsibilities.
    Let's go back to what Prime Minister Blair said. Basically, the 
whole idea of this Third Way is that we believe in activist government, 
but highly disciplined. On the economic front, we want to create the 
conditions and give people the tools to make the most of their own 
lives, the empowerment notion. On the social front, we want to provide 
rights to people, but they must assume certain duties. Philosophically, 
we support a concept of community in which everyone plays a role.
    Now, arguably, that philosophy has led, in every one of the 
countries here present, to some very impressive gains in economic 
policy, in crime policy, in welfare policy, and all of that. But I would 
like to ask you instead to talk about what the--what is the hardest 
domestic problem you face? What do you have to deal with that the--this 
so-called Third Way philosophy we've developed either doesn't give you 
the answer to, or at least you haven't worked through it yet? And how 
would you analyze what still needs to be done?
    I think it's very important that we understand--that we not stand up 
here and pretend that we have found a sort of magic wand to make all the 
world's problems go away, but instead we've found a working plan that 
sensible and compassionate people can ally themselves with and be a part 
of. But I think it's important that we, frankly, acknowledge what out 
there still needs to be done, what seems to be beyond the reach of at 
least what we're doing now.
    Tony, want to go first?

[At this point, the discussion proceeded.]

    President Clinton. Former Governor of New York Mario Cuomo used to 
say, people campaign in poetry, but they must govern in prose. 
[Laughter]
    Prime Minister Blair. Yes, we're on the prose part. [Laughter]
    President Clinton. That's one part of what you said. It's also true, 
as I used to say, that I never met anyone who did not support change in 
general--everybody's for it in general; hardly anyone is for it in 
particular. And I think that's another problem we face. But I agree with 
that.
    I'd like to follow up, but I'd like to go--Romano, what's your 
biggest domestic challenge?
    Prime Minister Prodi. My prose, my prose. [Laughter] My problem is 
that----
    President Clinton. Italians never have to speak in prose. [Laughter]

[The discussion continued.]

    President Clinton. I might say one of the interesting things to me 
as an American about

[[Page 1636]]

this consultative process in European governments is the extent to which 
it really does seem to work very well when practiced in good faith. I 
was just in Ireland, and Ireland has had the fastest growing growth rate 
in Europe, I think, for the last several years. Of course, it was 
starting from a lower base. But they have an intensive system like the 
one you describe.
    And I have been particularly interested in the practice in The 
Netherlands, and they have sort of a Third Way government. I wish that 
Prime Minister Wim Kok were here, but he couldn't come. But they 
actually have an unemployment rate more or less comparable to what--to 
Great Britain and the United States, and a more--certainly a more 
generous social safety net than we do, with a very, very high percentage 
of part-time workers showing a higher level of flexibility in the work 
force than virtually any country with which I'm familiar. So I think 
there is something to be said for this.
    One of the things that I think will be interesting is to see whether 
or not this whole model can produce both a good macroeconomic policy, 
which gives you growth, and lower unemployment in a way that still saves 
enough of a safety net for people to believe they're in a just society. 
I mean, it's a very tough thing.
    In France--France has had significant growth in several years and 
still not lowered the unemployment rate. So this, I think, is a big 
challenge. But I think the point you made is very good.
    What's your biggest domestic problem?

[The discussion continued.]

Problem-Solving in Advance

    President Clinton. I would like to make a brief comment and then go 
into the second question, and then after we all do that, then maybe Dean 
Sexton will come up, and we'll go through the questions. I think one big 
problem that prosperous countries have is, even if you have the right 
sort of theory of government, even if you have a strong majority 
support, is dealing with the huge problems that won't have their major 
impact until a good time down the road.
    For example, almost all developed economies are going to have a 
serious intergenerational problem when all the so-called baby boomers 
retire. And we are hoping that sometime early next year, that we'll be 
able to get our big national consensus in America to reform Social 
Security system, the retirement system, and our Medicare system, our 
medical program for elderly people, in a way that will meet the social 
objectives the program has met, in Social Security's case, for the last 
60 years, and in the case of Medicare, for the last 30-plus years.
    And we know if we start now, we can make minor changes that will 
have huge impacts. If we wait until it's a major crisis, then we'll 
either have to raise taxes and lower the standard of living of working 
people and their children to take care of the elderly, or we'll have to 
lower the standard of living of the elderly to protect the working 
people and their children.
    So clearly this is something that it's really worth beginning now 
on, because by doing modest amounts now, you can avoid those dire 
consequences. And to be fair, I think the whole success of our kind of 
politics consists in our being able to hold people together, to give 
people a sense that there really is a genuine sense of community out 
there.
    Ironically, in Japan, they have just the reverse problem: everybody 
is so panicked about it because their society is even older than Great 
Britain and the United States and Italy that they're almost oversaving, 
and it's hard to get growth going there. But for us, the other problem 
is the bigger one.
    Now, having said that, I'd like to segue into the international 
arena. It seems to me that all of us who are internationalists are 
pretty good at solving problems when they're hitting us in the face, but 
not very good in convincing our parliaments to give us the investment to 
build progress over a long period of time that will avoid those problems 
in the first place.
    For example, we all got together and stopped the war in Bosnia after 
too many people have died and had been on television for too long, and 
there was too much blood in the streets. And it was quite expensive, but 
we're all glad we did it. Now, for a pittance of what that cost, we 
could all send him a check, and we'd never have a problem like that in 
his country. I mean, that's just one example. [Laughter] I don't mean 
just give the money, I mean investment. You know, I don't mean--you know 
what I mean. But this is a big problem.
    Hillary and I were in Africa a few months ago in a little village in 
Uganda, looking at all these microcredit loans that have gone to women 
in this small African village and watching

[[Page 1637]]

them put together the infrastructure of a civil society. Now, the United 
States funded, with our aid programs, 2 million such loans last year. In 
a world with 6 billion people, with whom several billion are quite poor, 
we could fund for a modest amount of money 100 million such loans a year 
and create the core of a civil society in many places where we would 
never have to worry about terrorism, where we would never have to worry 
about huge public health outbreaks, where we'd never have to worry about 
these massive environmental problems.
    So I put that out because I do believe that somehow, the investment 
systems of the global economy, through the World Bank, the IMF, and 
other things, are not--nor are the aid systems of various countries or 
in the aggregate, the EU--adequate to deal with what I think is the 
plain self-interest of the developed world in helping prove this global 
system will work for ordinary people, not because it's the morally right 
thing to do--it is the morally right thing to do--but because it would 
be good for ordinary Americans 10 years from now not to have to worry 
about other Bosnias, not to have to worry about the Ebola virus going 
crazy, not have to worry about the horrible problems of global warming 
and malaria reaching higher and higher climates. All these things, these 
are things that require disciplined commitments over a lifetime.
    Maybe I've had it on my mind because I've been at the U.N. today, 
but if you think about what we spend on that as compared to what we 
happily spend to solve a problem--I mean, for example, if--God forbid--
things really went bad in Albania and Kosovo at the same time, and you 
called me on the phone and rang the bell, you know, we would all show 
up. Whatever you tell me to do there, I'm going to try to help you, no 
matter how much it costs, right? But for a pittance, over a period of 
years, we could maybe move so many more people toward the future we 
seek.
    And that goes back to the point Tony made. How do you have a 
genuinely internationalist outlook that resonates with the people that 
we have to represent, the kind of people that are out there on the 
street waving to us when we came in today, people who have worked for 
very modest salaries, and the kind of people that keep NYU Law School 
going--how do we make the argument that some of the money they give us 
in taxes every year should be invested in the common future of 
humankind?

[The discussion continued.]

Human Rights Issues

    President Clinton. Well, I think it does limit it, but I think that 
the answer to that is to keep pushing for more democracy and for more 
gender equality and more concern for all children, especially young 
girls. A lot of the most perverse manifestation of gender inequality 
that I have learned from Hillary's experiences has to do with the 
treatment of young girls and whether they get schooling and other kinds 
of things that are regularly offered to young boys in some developing 
societies. So I think that's very important.
    But if you go back to your question, we're just celebrating the 50th 
anniversary of the Universal Declaration of Human Rights, something I 
talked about over at the U.N. today. Well, those human rights are not 
universal, but they're more widely embraced than ever before. I think we 
should push all these things simultaneously. I don't think you can 
possibly say, ``Well, we won't do this until we've got these other nine 
things done.'' If we took that approach toward any endeavor in life, no 
business would ever be started, no marriage would ever be undertaken, no 
human endeavor would ever be undertaken.
    I do think the accurate part of Professor Dworkin's implication is 
that if there is no prospect of achieving any advances on these fronts, 
then it's going to be hard to have a truly democratic market society. I 
do believe that. But I think that we just have to face the fact that 
some cultures are going to be different from others, and if they have 
democratic governments, we should keep pushing them on these other 
fronts. That's my view, anyway.

[The discussion continued.]

    President Clinton. At the risk of getting myself in trouble, let me 
give a very specific example of--Professor Dworkin asked about women's 
rights. I think there is a very great difference in the question of what 
our policy should be, let's say, toward the Taliban--if they take Muslim 
women who are doctors and say, ``You can't practice medicine anymore,'' 
in ways that really put the health system of the country at risk, 
because it violates their religious convictions--and how should we 
approach them, and how

[[Page 1638]]

should we approach a country, let's say, in Africa or Latin America, 
which historically has had gross disparities in the education rates of 
young girls and young boys. I would argue that if you go into those 
countries and you start putting money into education, you start putting 
money into education technology, and you start putting money into these 
villages and microenterprise loans for village women, giving them power, 
independent power to the economy, that you will get the objective you 
want by making sure women get treated more equally with men, and their 
children are much more likely to be treated more equally.
    So I think you have to look at it on the facts. Whereas, with 
another kind of society you might say, ``Well, we need to approach a 
different strategy,'' But to go back to what Mr. Prodi said, 9 times out 
of 10 or more, it doesn't make any sense to isolate them. It's still 
better to try to find some way to engage these countries and work with 
them if they're willing to deal with us on peaceful and honorable terms.

Education

[Referring to the First Lady's description of the government, the 
economy, and society as three legs of a stool, moderator John Sexton, 
dean, New York University School of Law, read a question concerning the 
role and goals of education, and the discussion continued.]

    President Clinton. I think the issue in education--I think the first 
question was, should it primarily teach good citizenship. I agree with 
Tony; you can't be a good citizen if you can't function. I think what 
you want is an education system that teaches knowledge, citizenship, and 
learning skills. You basically have to teach people how to keep learning 
for a lifetime. And I think that every country is different, but you 
have to disaggregate what the challenges are.
    For example, if the system itself is of good quality but 
insufficiently accessed, or if there is no system, then what you have to 
do is just fix something that people can access. If the system is all 
there, but encrusted to some extent and not performing, then you have to 
go after the system, and that's much harder. That's what Tony was 
saying.
    In our country, we have now dramatically increased access to higher 
education. Really, if you look at all the tax benefits, the 
scholarships, and the work-study programs and all this, there's almost 
no reason that anybody in America who can otherwise qualify shouldn't go 
to college now. We need to do the same sort of thing, I think, with 
preschool programs, starting with very young children. We need to build 
that infrastructure out there. Now, in the schools, we need to do 
better, and part of it is influence. We need more good physical 
facilities. We need more teachers in the early grades. We need more 
teachers in the underserved areas.
    But a lot of it is--are quality things. We need more competition. 
That's why I'm for the charter school movements and public school 
choice. We need more standards and accountability. That's why I'm for 
the master teacher movement and for--we need an end to social promotion. 
But if you do that in the inner-city schools and you have the kind of 
standards, as Tony is talking about, and you actually hold people, 
schools, teachers, and students, accountable for student performance, 
then I would argue, ethically as well as educationally, we are obliged 
to do what has been done in Chicago and give every child who is not 
performing well the chance to go to summer school and the chance to be 
in an after-school program. Chicago now has--the summer school in 
Chicago is now the sixth biggest school district in America--the summer 
school--and it's a great thing. And guess what happened to juvenile 
crime? So I just would point that out.
    I think that each society needs an analysis of what it takes to take 
this three-legged school up--some of it is going to be more, some of it 
is going to be better. And it's very important not to confuse more with 
better in either direction, because better won't make more, but neither 
will more make better. By and large, most of us need to be doing some 
mix of both.
    Mr. Sexton. Mr. President, I would be wrong to leave the topic of 
education without noting something narrowly self-interested, but 
important to many of the students, many of the students in this room.
    President Clinton. It's the American way; do it. [Laughter]

[Mr. Sexton thanked President Clinton for his efforts to eliminate the 
taxability of loan repayment assistance for law school tuition for 
former students who choose to forgo higher pay to enter public service.]

    President Clinton. I think that's very important. If that were the 
definition of narrow self-

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interest that most citizens embraced, this would be a better country 
today. That's great. [Laughter]

[The discussion continued.]

Environmental Issues

    President Clinton. First of all, let me go back to the basic 
question as I remember the basic question was: Will environmental 
security be like a military security issue in the 21st century? The 
answer is, I think it's very likely that it will be. And the more 
irresponsible we are for a longer period of time, the more likely that 
is to happen.
    I think it's useful in looking at environmental problems to break 
them down into two categories, although there's always some overlap. One 
is, there is one truly global environmental problem, and that's climate 
change, because the climate of the Earth is changing in ways that 
already is disrupting life throughout the Earth.
    I mentioned one example earlier. You have mosquitoes at higher and 
higher levels now giving people malaria who never got it before. And 
there's no resistance to it so they're getting sicker, and they're 
getting on airplanes and flying. And now they're bumping into people at 
airports, and there's now a phenomenon called airport malaria in the 
world, where technology and global warming are bumping into each other. 
That's a global problem. You can see it in weather, in disease, and a 
little bit in air pollution.
    Then there are national problems which have global impacts because 
they're so big, and they prevent countries from becoming what they ought 
to: air pollution, water pollution, soil erosion, food supply pollution, 
those kinds of things. Then there's a huge problem we've got that's sort 
of in the middle. It's partly the result of global warming and partly 
the results of national pollution, and that is the degradation of the 
oceans, which is a breathtaking environmental problem that, if 
unaddressed, we will pay a huge price for.
    Now, from my point of view, there are two big issues here. One is--
and I agree with Tony--I think Kyoto is a big step forward. So I go to 
my Congress that's supposed to be Republican, free market oriented, and 
I say, ``Okay, guys, no regulations and no taxes, tax cuts and increases 
for research and development.'' And they say, ``It's a Communist plot,'' 
and they hold hearings--[laughter]--about how, you know, this is just 
some deep, dark conspiracy to undermine the strength of the United 
States. Now, wait a minute. You're laughing about this, but actually 
behind this, as opposed to some other things, there is the core of an 
idea they have. [Laughter]
    This idea, widely shared in the developing world and held onto in 
America more than any other developed country, is--it goes right against 
what Tony said is--this is a very serious comment. We're having fun, but 
this is a serious conversation. Their idea is that there is an 
inevitable iron connection between the production of greenhouse gases 
through the burning of fossil fuel and economic growth, and if you 
reduce greenhouse gases going into the atmosphere, there is no way on 
Earth that you will not reduce economic growth. There's all this 
business about technology and conservation and it's all a big plot 
designed to bring down the growth machine of America. Now, you laugh--
we've had hearings on it. We've spent hundreds of thousands of dollars 
complying with subpoena requests and document requests and sending 
witnesses up to the Hill to basically say, ``This is not a conspiracy to 
destroy the future of America.''
    But the serious idea here is, if you want something done about 
climate change, you must prevail in every developing country with 
evidence--evidence that there is no longer an iron connection between 
the burning of fossil fuels and economic growth.
    The second point I want to make goes to the second question they 
asked, about how come we spend so little on foreign aid on the poor now? 
Because they don't have any votes in our country and because we don't 
think enough about it. I mean, every year my foreign aid budget is cut 
back.
    But one thing we can do is to participate jointly with other 
countries in environmental projects in developing countries in ways that 
help reduce climate global warming and create lots of jobs in areas 
where there are lots of poor people. I believe if there is a serious 
global effort to deal with these environmental challenges, we would be 
investing all over the world the way the United States did, for example, 
in a massive reforestation project in Haiti. And when you do that kind 
of work--a lot of this work is very basic work that needs to be done--

[[Page 1640]]

you can create huge numbers of jobs for poor people who would otherwise 
not have them.
    So I would say to all of you, I think this is a big opportunity--I 
tried to say some provocative things to make you laugh so you'd listen, 
because it's late in the day and you're all tired. But I'm telling you, 
the biggest environmental--the obstacle to our having responsible 
environmental policy in the whole world, including in the United States, 
is the belief of too many policymakers in 1998 that there is still an 
iron law between how much junk you put in the atmosphere and how much 
your economy grows.
    And until we break that in the minds of decisionmakers, we will not 
do what we should do on the climate change challenge. And until we do 
it, we are playing Russian roulette with our children's future and 
running an increased risk that this will be the national security issue 
of the 21st century.

[The discussion continued.]

Closing Remarks

    President Clinton. John, I would like to thank you, the law school, 
and NYU and the other sponsors of the event. Again, let me thank all of 
you who participated. And I want to thank Hillary and Sid Blumenthal and 
the others who conceived of this, and Mr. Blair's folks in Great Britain 
who worked so closely with us on this.
    I would like to close with--ask for just a brief reprise of two 
things we talked about. One is, can this whole Third Way approach be 
applied successfully to long-term problems that have big consequences 
before they have them, i.e., in American terms, Social Security, 
Medicare, climate change. Two is, can we not only develop a global 
consciousness and global policies within our respective country but 
actually band together to deal with this present global financial 
challenge in a way that gives us a trading system, a labor rights 
system, an environmental system, and a financial system that, in effect, 
recreates what works on the national level globally, that in effect 
takes these great 50-year-old institutions and does whatever has to be 
done to make sure that they see us through for the next 50 years.
    Will the ideas that we've developed and the approach that we have 
developed work in those two great areas of challenge? Because if they do 
work in those two great areas of challenge, then I think that the 21st 
century is in very good hands.
    Thank you very much.

Note: The President spoke at 4:42 p.m. in Greenberg Lounge at the New 
York University School of Law. In his remarks, he referred to James D. 
Wolfensohn, President, World Bank; Prime Minister Wim Kok of The 
Netherlands; and Ronald Dworkin, professor, New York University School 
of Law. The transcript released by the Office of the Press Secretary 
also included the opening remarks of Prime Minister Blair.