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FAREED ZAKARIA GPS
Interview with David Miliband. Examining How Cell Phones Are Helping Developing World; Reid Hoffman Talks Midterm Elections. Aired 10-11a ET
Aired November 4, 2018 - 10:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[10:00:25] FAREED ZAKARIA, CNN ANCHOR: This is GPS, the GLOBAL PUBLIC SQUARE. Welcome to all of you in the United States and around the world. I'm Fareed Zakaria, coming to you live from New York.
Today on the show, amidst anxiety and anger, discord and distrust, Americans will vote on Tuesday. The president himself is not up for reelection but the vote is a referendum on his rule.
(BEGIN VIDEO CLIP)
DONALD TRUMP, PRESIDENT OF THE UNITED STATES: A vote for Morrissey is a vote for me. A vote for David is a vote for me. And a vote for Steve is a vote for me.
(END VIDEO CLIP)
ZAKARIA: Which way will it go? I have a great panel to talk about it.
Also, Brazil just elected a man whom some have compared to Donald Trump. And Angela Merkel announced she will step aside in Germany as right-wing populism has gained ground there.
We'll take a look at the state of democracy around the world.
But first here's my take. It is commonplace to hear and read about President Trump's takeover of the Republican Party. And suddenly there's lots of evidence that the GOP is animated these days by an unquestioning devotion to Trump and whatever his ideas may be at any given moment. But the problem for the Republicans is that they are now becoming the party not of Donald Trump, but of Joseph McCarthy.
Consider the most recent example. Trump has scared much of the country about a small group of Central Americans fleeing poverty and violence who are hoping to come to the U.S. border and apply for asylum. It's reasonable to oppose letting them in, but Republicans have not been content to oppose granting asylum. They have concocted facts out of thin air and invented conspiracies about who is behind this group of impoverished migrants.
Two weeks ago, one of the most prominent hosts of FOX News, which is now the Pravda of the Republican Party, suggested that more than 100 ISIS fighters have been caught trying to use this caravan. Trump, a devoted viewer of FOX, pounced on the claim, declaring that unknown Middle Easterners had joined the caravan.
Representative Matt Gaetz of Florida asked whether Democratic donor George Soros was funding this movement. None of these claims has an iota of truth to it. but they are repeated and reinforced across the country. The notion that Soros is the dark mastermind behind all these movements is now deeply logged in the Republican Party.
So much so that senior party leaders like California's Representative Kevin McCarthy and Iowa Senator Charles Grassley repeat it almost reflexively. Representative Steve King of Iowa has actually accused Soros of backing a grand scheme to systematically introduce foreigners in order to replace Americans, by which he means whites, with somebody else's babies.
The slurs against Soros are revealing. Let's remember, George Soros is one of the most successful capitalists in history whose foundation has spent over $14 billion to date much of it to support anti- communist and human rights group first in Eastern Europe and then around the world. He has funded various liberal ideas as well, for sure, from prison reform to the legalization of marijuana, many of which are actually now in the mainstream.
So why the focus on him? He's not the only big funder of liberal causes and candidates. Soros is the perfect bogeyman for conspiracy theorists. He's rich, powerful, grew up abroad and has a foreign accent. Plus he is Jewish. Many Republicans now speak openly and often about the dangers of globalists. But for some reason, these globalists all tend to be Jewish financiers, Lloyd Blankfein, Janet Yellen, George Soros, Gary Cohn.
Given the ugly historical smears in this regard, one can only conclude that elements of the Republican Party are either clueless about anti- Semitism or actively encouraging it.
America has a history of paranoid politics, infused with the belief that there is some hidden conspiracy to betray the republic. But these forces used to be peripheral, voiced by marginal figures. When they seemed to be growing, as with the John Birch Society in the 1960s, mainstream conservatives like William F. Buckley publicly and forcefully denounced them.
Today senior Republicans emulate them. President Trump has given a ringing endorsement to Alex Jones, the country's most influential and extreme conspiracy theorist.
[10:05:02] Trump said in a 2015 interview with Jones, "Your reputation is amazing. I will not let you down."
The Republican Party has many good people and good ideas. But none of them matter while it houses and feeds fantasies, conspiracies and paranoia, tinged with racism, bigotry and anti-Semitism. Republicans are now squarely the party of Joe McCarthy, and until that cancer is excised, it should not be entrusted with power.
For more go to CNN.com/fareed and read my "Washington Post" column this week. And let's get started. Let's go to today's political panel, Katrina vanden Heuvel is the
editor and publisher of "The Nation." Anthony Scaramucci was briefly the communications director at the Trump White House. He is the author of a new book, "Trump: The Blue Collar President." And James Fallows is a national correspondent for "The Atlantic." He and his wife Deborah are the coauthors of terrific book, "Our Towns: A 100,000 Mile Journey Into the Heart of America."
Jim, let me start with you. If you were to look at the state of America, the statistics, the economy is doing very, very well. Consumer confidence is very high. Unemployment is down. Things like crime are down. Illegal immigration is way down. And yet Donald Trump is running not on a-morning-in-America campaign, but an evening- in-America campaign, some might say midnight in America campaign. Why do you think that is?
JAMES FALLOWS, CO-AUTHOR, "OUR TOWNS": So it's a fundamental question and of course we are all operating behind a vale of ignorance here. Three days from now we'll all say oh, this was a huge mistake, like Pete Wilson in California and running his anti-immigrant campaign wonder, or else it was another strategic insight that Trump had that nobody else saw it coming.
But I think that there are two things we can say now. Number one is emphasize how different this is from the way any past president has behaved. That usually they have taken any opportunity to use positive economic news as the thing to bring everybody together. People who didn't support them. So you can think of Ronald Reagan running for re-election, morning in America. People who didn't support him the first time could be with me.
Bill Clinton often chafed in 2000 that Al Gore did not run on the street peace and prosperity mess at Geneva that he would have been elected then. So first this is really unusual. Second, I think it's out of sync with what Deb and I saw in most of the country where people basically feel better about the direction of their lives than this dark tone suggests.
I think it's interesting that the -- the places where you have the strongest anti-immigrant fear which Trump is closing with are places without immigrants, where the refugees aren't, the immigrants aren't, places like Steve King's district.
ZAKARIA: Anthony, Trump has a -- kind of a base only strategy from the start. And you know, one of the things I think people try to understand about this is, where does this come from? Why does he -- you know, he plays on people's fears more than their hopes. It seemed to work very well for him in the primaries. I think he alone figured out on that whole Republican ticket that, you know, the people didn't want to hear a version of the Reagan formula. They wanted to hear about Mexicans, about Chinese people, about Muslims.
Is that -- is it become instinct for him now?
ANTHONY SCARAMUCCI, FORMER WHITE HOUSE COMMUNICATIONS DIRECTOR: Well, I mean, I would frame it a little differently. I think what the president was basically saying about the illegal immigration is by stopping illegal immigration, you take the slack out of the labor market, and that effectively happened in both the African-American and Hispanic American labor statistics. They are the lowest in recorded history.
And it's a base strategy, Fareed, because he is trying to get the participation up. He recognizes as most president do he's the leader now and the opposition is going to be way more angry and they are going to come out and vote more aggressively. And so a lot of other presidents took more of a Rose Garden strategy as it related to going out on the campaign. But he's decided not to do that. He is barn storming the nation. And he's making a bet, and it's a low risk best for him, Fareed, because if he makes this bet and he wins people will say that he's a genius three days from now.
If he doesn't win, he'll just say, well, you know what, President Obama got, using his own words, shellacked in 2010, lost 63 seats. I'm going to likely lose 35. He'll call it a win and reframe it. So in his mind I don't think he has any risk in this strategy.
ZAKARIA: Right. So who is going to turn out more? We see these early turnout numbers. And turnout is up. Do you think it's the Democrats or it's the Trump voters?
KATRINA VANDEN HEUVEL, EDITOR AND PUBLISHER, THE NATION: Well, as we were talking about, Fareed, I mean, in Texas and Georgia you're seeing a 500 percent increase among young voters which suggests an enthusiasm for Democratic candidates. People who are studying the mobilization and the activism on the group, at the grassroots, say they haven't seen anything like this since 2012. It's all about turnout so I think that's very important.
[10:10:03] I take hope, thinking of what James said, from a resurgence of progressive energy and candidates across this country from Omaha to Detroit, from Brooklyn to Amish Country in Pennsylvania. And I think in that you see a new generation seeking change, and not just resistance, but wanting to shape the future. You see women mobilized as never before. They came out of the Women's March, the largest political protest in U.S. history, not just to march but to run for something.
ZAKARIA: But let me ask you, the "Washington Post" has a new poll out which says that the generic ballot has been cut almost I think from 15 points to 11 or even -- I think it's 8.
VANDEN HEUVEL: Right.
ZAKARIA: So almost in half. And they attribute it to the fact that Trump has been able to nationalize election about immigration, an issue that doesn't play well for Democrats. Are Democrats taking the bait and letting the election be defined by immigration?
VANDEN HEUVEL: No. Look at the closing arguments. I mean, Trump is closing with fear, loathing and bigotry. Democrats are closing with affordable health care and pre-existing conditions, and pointing to governors and to Congress people who voted 20 times to repeal the ACA. So I think what you're seeing is the Democrats need an aspirational message moving forward about how you invest in the working people of this country for economic growth and how you show the government is on the side, on the side of people.
But I am excited that I think we're witnessing a sea change. I'm cautious about Tuesday because we need to be cautious. But I think the House goes back. But more important in some ways as important look at the state houses, look at governorships, and let us hope that the barriers to Democratic participation, the ferociously well-funded suppression of the vote doesn't demean out country? It is not a right-left issue.
ZAKARIA: OK. We've got but --
VANDEN HEUVEL: It is right or wrong.
ZAKARIA: James, give -- you have 40 seconds.
FALLOWS: So, first, I agree with Katrina the way this is being wage district by district is largely on health care, economic issues, and to recognizing the immigration fury but they're not sort of taking the bait in that way. The other turnout point I agree also that is crucial is not even just how many people go to the polls on Tuesday but how many people have entered the process. Especially young people, veterans, women, people of different races.
And so we've seen that before in 1974 with the Watergate boom, 1994 with Newt Gingrich, in 2010 where the Tea Party. This could be another such wave with that kind of turnout.
ZAKARIA: I know we have to get to Anthony and we will right after this. I'm going to ask him how Trump would react if there were a Democratic House of Representatives.
[10:16:51] ZAKARIA: And we are back with Katrina vanden Heuvel, Anthony Scaramucci, and James Fallows.
Anthony, let's posit for a minute conventional wisdom is right, the Democrats take the House, they don't take the Senate. How does Trump react in a situation like this? Because the strategy you described the base only strategy might work well, it might even bring turnout up, but for governing it's a harder strategy.
SCARAMUCCI: It's a harder strategy so he'll take two choices. They'll either build a bridge or the Democrats try to cut something on immigration, on infrastructure or build a wedge with the Democrats and get leaned in there. Will there be more political dysfunction going into the 2020 re-election campaign.
I think his instincts would be to build a bridge to them because at the end of the day, the president has always said this on the campaign trail and in private that there are deals to get done. And if he can cut a deal on -- he's going to finish the trade deal with China, I predict that happens by the end of January. Gets a trade deal done with China.
He'll have the trade deal done with Canada and Mexico. He'll work on something in Europe if he can cut an immigration deal going into the 2020 re-election campaign I think that would be fabulous for him and he won't say that he lost because he'll look at the historical context of the other races --
ZAKARIA: He never says he lost.
VANDEN HEUVEL: He never said --
SCARAMUCCI: Of course.
ZAKARIA: But let me ask you this. You watched him and you've known him for a long time. People don't realize that. Do you think he operates from instinct or analysis?
ZAKARIA: So when he does this thing, you know, I'm going to go for the cultural issues not the economic issues, is it the feel of is it analysis?
SCARAMUCCI: Arguably the best instincts that I have ever seen politically, but he's also analyzing things. People do not give him enough credit for his analytical capability because they want to two- dimentionalize him but he's also analyzing the data and that's why he's looking at it, saying, look, I need to get the voter participation up and so I'm going to go right after my base and tell them that this is an election about me personally, and I'm going to barn storm the nation.
You know, he is like what the NFL calls a game changing player. OK. The other presidents said you know what, Rose Garden strategy, a couple of campaigns. He is acting like it's the 2016 election. And so whether you like that about him or not I give him credit for that level of energy and the robust style that he's handling of it.
ZAKARIA: What are you seeing on the Democratic side?
VANDEN HEUVEL: Well, let me just say, though, on Trump. It's not just about Trump, it's about Trumpism and the forces of Trumpism, as you spoke in your powerful opening introduction, Fareed. We've seen this before. They are enablers in the Republican Party. The Republican Party has been hijacked. It's now the party of Trump.
For the Democrats I think what's vital, I mean, Trump has not reached out his hand to the Democrats. I think they need to take back the House and show that they are on the side of people. Not vindictive hearings but hearings to lay out affirmative aspirational ideas that they can act on when they fully take that power.
ZAKARIA: So don't go after Trump too hard.
VANDEN HEUVEL: No, I think accountability is key.
ZAKARIA: Well, you --
VANDEN HEUVEL: Exposing corruption that hurts you not just for corruption for the sake of going after Trump. It will be interesting because the congressional progressive caucus, the largest values based caucus in the House, who have about 90 members. Thirteen committee chairs, 30 sub-committee chairs. They can do a lot to lay out an agenda that is forward looking.
ZAKARIA: Should this start -- be an impeachment process?
[10:20:02] VANDEN HEUVEL: Where I sit at "The Nation," there are many different views. We have different views as do many on the progressive left.
ZAKARIA: The surest way to drive up his support --
VANDEN HEUVEL: I believe in accountability. But I think you have to build out impeachment but I am for laying down markers to show that the Democrats progressives stand with people in this country and Trump never drained the swamp, and the swamp is now filled with even more alligators. So there is a lot of work to be done. And I would say to young people who have entered this as Jim said so eloquently, have been mobilized for the first time, you're not going to win everything but you must stay in. It's going to be a long struggle.
ZAKARIA: The millennial --
VANDEN HEUVEL: Persevere. Persistence.
ZAKARIA: Yes. The millennial stuff is really fascinating. Millennials -- I'm sorry, I think if you look at people 40 to 60, roughly 65, they are about 50-50, you know, Democrat-Republican. Twenty or 19 to 40, they are 58-34, Democrat to Republican.
VANDEN HEUVEL: Why do we have voter suppression?
FALLOWS: A product of the educational system.
ZAKARIA: What -- I don't know. Brainwashing doesn't work. They tried to do it in the Soviet Union. Whatever you may think about American campuses people react against --
VANDEN HEUVEL: I know but I think they see in it.
ZAKARIA: All right. Let me ask Jim to talk about previous wave elections because he had a very interesting point about what you noticed about previous midterm waves.
FALLOWS: Yes, so there have been big midterm waves. In 1974 the Democrats won huge gains. Gary Hart came in then after Watergate. Democrats again won big gains in 2006, when lots of people -- Nancy Pelosi became speaker. Republicans' big waves were in '94 against Bill Clinton and 2010 against Barack Obama.
The interesting thing is the Democratic waves were after some kind of scandal or disaster. After Watergate, after the Iraq war. The Republican waves were after a Democratic president accomplished something. After Bill Clinton got his budget deal through and failed with his health care plan and after Obama got through Obamacare. There was sort of motivating thing. So it's just odd about the two parties. And on form that would suggest the Democrats are more motivated this time. We will see.
ZAKARIA: And we got to leave it there. Thank you. A terrific panel and very civilized airing of disagreements.
I want to close out the panel by saying one word to my American viewers. Vote. Well, maybe a few more words. If you are over 18, please do exercise your rights and vote. I know many people think it's pointless that your vote doesn't matter, but of course if we build a culture of abstention and indifference then fewer and fewer people will vote other than fanatics. And do you really want our politics to get more like that? So just make it a habit and vote.
We will be back.
[10:26:33] ZAKARIA: The United States is not the only nation whose elections are in the news. A week ago, Jair Bolsonaro won the Brazilian battle for president by a large margin. Often compared to Donald Trump the far-right Bolsonaro is anything by politically correct. He has been racist, misogynist and homophobic. He's spoken glowingly of authoritarian and military rule.
A day later and an ocean away, Angela Merkel announced she would not seek re-election when her term is up. This means that Europe's most powerful nation is likely to make a move perhaps to the edges of politics likely to the right. The worldwide antiestablishment wave is growing ever larger, ever stronger.
Joining me to discuss is David Miliband, the former Foreign secretary of the United Kingdom and the president and CEO of the International Rescue Committee.
David, you were the kind of smart centrist that --
DAVID MILIBAND, FORMER UNITED KINGDOM FOREIGN SECRETARY: I'm not a representative of the establishment. That's --
ZAKARIA: But you -- you know, it was Bair, you know, Clinton politics. Has that just been swept away by this -- you know, because you look at Mexico and there you have a left-wing populist who gets elected. In Brazil a right-wing populist gets elected. MILIBAND: I think there are two things that explain the move to the
extreme in both countries. One you have to talk about the corruption that really tainted both the former governments in which both of the two candidates that you've mentioned ran on. Secondly, we're in an age of economic extremes. And economic extremes do produce political extremes even if you're not a pure economic determinist, you can see that the kind of strains that are being put on societies across, not just the Western world by across the world by economic inequalities, are really fuelling some of this, quote-unquote, anti-establishment drive.
ZAKARIA: What do you think explains the success off the two places where a kind of center left candidate has done well, Canada and France? I mean, what lesson do you draw up from that?
MILIBAND: Well, I think there are two -- there are a couple of things that are really important. First of all, never underestimate the candidate matters. The Prime Minister Trudeau, President Macron, the candidate really matters. Secondly and very, very importantly I think both of those candidates ran as representatives of a new kind of future for their countries. They wanted to break with the past. They weren't saying continuity.
ZAKARIA: They were also kind of anti -- outside the establishment themselves.
MILIBAND: They were change candidates. They both represented change. I mean, Macron in his own party ended the political system. Prime Minister Trudeau from Prime Minister Harper's rather more austere and dower view of Canada's future.
I think the third thing that's also important is they managed the very difficult social and cultural issues in a very skillful way. In both countries they showed that they wanted an open engaged modern if you like view of Canada and of France. But they were clear that they weren't going to be a pushover, they weren't a soft touch. And I think that's been important in both --
MILIBAND: Both cases.
ZAKARIA: They're both tough on immigration, for example, interestingly.
MILIBAND: Remember, Prime Minister Trudeau ran that he would admit 30,000 refugees into Canada and he was building on historic role that Canada has played as a moral leader as well, but it was going to be seriously and properly done.
ZAKARIA: Right. Merkel? How should we read Angela Merkel? At some level she's saying she's going to leave in 2021. Nobody really thought she was going to run. At that point she'd be --
MILIBAND: Yes. I mean, she was going to retire anyway and this was always going to be her last term. I think there are two things. And I feel very torn about this. On the one hand she's clearly modernized Germany in a remarkable way. It's a country far more at ease with itself in the modern world than it was 15 years ago. On the other hand despite her profound commitment to the European Union, Europe is at risk today. And I would say she hasn't been enough of a reformer in Europe. She's really been very, very cautious in the way that she's developed her European agenda. President Macron's ideas are now a little bit stalled. And the danger of the next couple of years, I don't think, is that there will be a shift in the extreme but that, at a time when Europe needs change, it's stalled. And that's, I think, the big challenge for all of the pretenders to her throne.
ZAKARIA: We -- now I want to talk about Yemen. You just were there. I want to show viewers a disturbing picture. Warning: this is a seven- year-old, Amal Hussein, suffering greatly from malnutrition. This was -- this picture was her. She died on Thursday. And her death has become a symbol of Yemen's tragedy. The image was published last week in the New York Times.
Today the Times magazine has a cover story on Yemen by Robert Worth. It is really worth reading. It is the single best article on Yemen I have read, absolutely brilliant.
David, you are just back from there. It is the worst humanitarian crisis in the world. I think one of the things Worth's article points out is that a lot of people in Yemen blame the United States. They look at Saudi Arabia's war in Yemen. They think it has been -- it was announced in Washington by the Saudi ambassador. The weapons are provided by the United States...
MILIBAND: Yeah, look...
ZAKARIA: ... training, intelligence.
MILIBAND: ... and that picture is not an isolated example. The reason it was right to publish it is that there are, according to the U.N., 14 million people on the verge of famine in Yemen. It is a humanitarian emergency. But it's also a political emergency.
I drove from Sanaa, the occupied capital by the Houthi group, towards the war zone in Hodeidah. We got within 45 kilometers. Every checkpoint we went through, there were 11-year-old child soldiers who had been recruited by the Houthis, with guns over their shoulders. And what were they chanting? "Death to America."
Now, that is the reality. On the ground, this is seen as America's war. And it's not just producing humanitarian catastrophe, the politics are terrible. It's notionally a war being waged to back the Iranians. The Iranians are stronger than they were four years ago. It's a war notionally being waged against Al Qaida and ISIS. They are thriving in the chaos. And the absolute imperative, for humanitarian reasons, as well as geopolitical reasons, is for the cease-fire call that Mike Pompeo, Secretary Pompeo, issued earlier this week to be followed through.
Because I can tell you, from our people on the ground, there has been more fighting since Secretary Pompeo's announcement, not less, as people try and take advantage -- essentially the Saudi-led coalition try and take advantage of the 30-day time span that he set.
ZAKARIA: Do you have -- briefly, do you have any hope that things are going to change because the Saudis are a little bit more under pressure because of all the...
MILIBAND: It's in America's power to change this. The U.N. Security Council needs to meet immediately. Britain, which is notionally the pen-holder at the U.N. Security Council, needs to get its pen out and start writing. The French need to come in as well. And the Security Council needs to issue a call to codify Mike Pompeo's call for a cease-fire into a set of demands on the parties and opening of the ports, opening of Sanaa airport, the payment of the salaries to doctors and nurses. Because children like the one you showed are not getting treated because of the war, but also because doctors and nurses are not getting paid.
ZAKARIA: But do you -- do you have any hope this is going to happen?
MILIBAND: There's a chink of light with the public American recognition that the war strategy is failing and it's now time to -- we're in a hole; they've got to stop digging, and we've got to dig the people of Yemen out of this terrible situation.
ZAKARIA: David Miliband, always a pleasure having you on.
MILIBAND: Thank you very much.
ZAKARIA: Next on "GPS," many of us in the First World love to curse our cell phones. They are too addictive; they cause us to miss out on real life. But in parts of the developing world, they have become absolute game-changers. That story, with one particular country, when we come back.
ZAKARIA: Now for our "What in the World" segment. Many believe that the great divide in America is exacerbated by technology, those super- computers in our pockets otherwise known as cell phones and the social media apps that are on them.
But in the developing world, cell phones and Internet access can represent something entirely different, tools that can bring about progress for the economy and society, particularly where the government has failed. Nowhere is this more clear than in India, where people are coming online fast. In 2000, India had just 20 million Internet users. Last year, it had 462 million Internet users and climbing. By 2025, the pool of Indian Internet users is projected to grow to more than 850 million.
Why is this happening? Well, most of these users are coming to the Internet via smart phones, which are extremely cheap in India, as is data. How could this phenomenon change the country and the world? Here to tell us is Ravi Agrawal, a former "GPS" senior producer who is now the managing editor of "Foreign Policy" and the author of the new book "India Connected." So, Ravi, first the breadth of the scale of this shift is extraordinary. I mean, some of those -- the statistics I have seen said two years ago India was 150th in cellular bandwidth consumption in the world. Now it's number one, higher than China, higher than the United States. Why is that?
RAVI AGRAWAL, MANAGING EDOTOR, "FOREIGN POLICY": Well, it's all because of the smart phone. And so if you look at India, say, 10, 15 years ago, the only way to get online would be to have a PC and a land line, which is how Americans were getting online in those days. But only 2 percent of Indians had PCs in the year 1999. So if you look at that trajectory, Indians were never going to get online in a mass way if it was only for computers or wireless.
But the -- the evolution that we've seen in America is a revolution in India. And that's because of cheap smart phones that are reaching hundreds of millions of people. That's getting them online. And, Fareed, it's more than just a phone. This is their first camera, their first alarm clock, their first video device -- all of that in one device. And that's why it is as powerful as it is.
ZAKARIA: And in many way a lot of things the smart phone will do will allow India to leap-frog over old models, Western models, American models, right? So, for example, Indians will essentially skip the laptop and go directly to the phone as the computer, as the portal to the Internet.
AGRAWAL: Exactly. And so Indians weren't really using credit cards, for example. Now they don't need to because so many of them are taking their business and their shopping online and they're using apps, you know, the equivalent of a PayPal or a Venmo. In India, for example, one of those companies is called Paytm. They're able to use those things for transactions in ways that are helping them to leap-frog and arrive in the digital economy.
And again, the reason why this is as exceptional as it is, is that India is still a very poor country. It is still mostly rural. It is still a place that has 300 million illiterate people who can now speak to their phone and the phone can speak back to them. They can watch videos. These are all things that are revolutionary and only happening because of a smart phone revolution.
ZAKARIA: There's one other element to India that is, kind of, unusual, which is that the government has created really the first biometric ID system. So every Indian has a biometric ID that's a random computer-generated series of digits. And what it means is, a banker in India was telling me, that the online banking system in India is faster than anywhere else in the world. He can set up an account in three minutes flat in India.
AGRAWAL: Yeah. Yeah, and that's because -- so this digital ID system, the biometric system -- it is often connected to bank accounts and it allows people to have a form of identification that they didn't have before that essentially says, "I am me." And it allows it to then connect to various other services in a way that is really remarkable. The Indian model could end up being a different model, where the
Internet and data is more of a public good that is controlled or managed by the government in ways of connecting people through something like (inaudible).
ZAKARIA: You talk in the book, which really is terrific, about some of the downsides, some of the cautions. But I think, for our purposes, it really is worth focusing on this extraordinary opportunity that this technology has given, as you say, to a very poor country. Ravi, pleasure to have you on.
AGRAWAL: Thanks a lot.
ZAKARIA: Next on "GPS," the founder of LinkedIn, Reid Hoffman, on the American midterm elections. He also talks about the race to start the next Facebook or Google in Silicon Valley.
ZAKARIA: My next guest, Reid Hoffman, is one of the most successful tech entrepreneurs in history. He is a co-founder of LinkedIn. He was an early investor in Facebook, an executive at PayPal. He is on the board of AirBnB and Microsoft, and much more. Today he is an investor at Greylock partners. He is also a generous philanthropist. According to Forbes, he fell off their 400 list because he gave away too much of his money to charity.
One of the thing he funds is liberal causes here in America. I wanted to talk to him about his politics and his new book, "Blitzscaling."
Reid Hoffman, pleasure to have you on.
HOFFMAN: It's great to be on.
ZAKARIA: Let me ask you about politics. You have been pretty active, and you say a lot of people who are in business share some of your dismay with what Trump stands for and what he's doing but they don't want to -- they don't want to say anything. Why?
HOFFMAN: Well, I think, you know, the classic thing is, "Hey, it's business; I've got a responsibility to shareholders; I have a responsibility to customers," and all of that. But I actually think that -- I have this phrase, "Spiderman ethics: With power comes responsibility."
And so I think, personally, that's it's part of having business leaders; you need to speak up about that future that you can see for all of us and you need to have your voice be heard. And so I have leaned into politics unlike ever I have done before because I think it's so dangerous, the path we're on, and we need to correct.
ZAKARIA: What do you say to people who point out that the Trump administration is presiding over, you know, record unemployment levels -- in other words, record lows; growth seems strong; what are you complaining about? HOFFMAN: So I think there's at least two things. So one is I think
Obama and the previous administration did a lot of good things. And so I think there is a tailwind from that. But I also think that people are underfactoring the amount of stimulus and just debt that's going into propping this up. And so they're using subsidies to try to block the impacts of tariffs and other kinds of things. And so I think we are taking a loan against the future that we need to be very cautious about.
ZAKARIA: So you've probably looked very carefully at the polls. You're a quant jock in some senses yourself. What's your sense of what's going to happen in the midterms?
HOFFMAN: So I think we're going to have a very strong showing in both the House and the Senate. I think we have a high probability, but people need to get out and vote. So, you know, I -- I have been putting a lot of energy into talking to all my business friends and all my friends and saying, you know, "Go vote Democrat in the midterms."
ZAKARIA: So let me ask you about the basic premise of this new book of yours, "Blitzscaling." The idea seems to be that, in order to manage, kind of, Herculean growth, dizzying growth, entrepreneurs should do everything possible to get to scale as fast as they can, even ignore what the customers want, even deal with a certain shoddiness in the product. That sounds very different from what a lot of business gurus will say, which is the customer always comes first. Explain.
HOFFMAN: So in this growingly connected world, more often, a growing degree, there are markets that we call "Glengarry Glen Ross" markets: first prize Cadillac, second prize steak knives, third prize you're fired." And so the first to scale is what really matters. The first to scale is the company, the product, the service that establishes the ecosystem, whether it's Facebook or Google or AirBnB or LinkedIn. And the set of techniques to do that are counterintuitive from a classic business perspective.
So it's, you know, ignore your customer, let fires burn, tolerate bad management, don't know what your customer acquisition cost is or your long-term value of your customer is, but scale as fast as possible.
ZAKARIA: Let me ask you about two people who seemed to follow your advice, Mark Zuckerberg at Facebook -- famous motto was "Move fast and break things -- and Travis Kalanick at Uber, who seemed to try to just move Uber as fast as he could to get greater and greater market share. One has succeeded spectacularly, the other not so much. Why?
HOFFMAN: Well, they both succeeded. They both built interesting companies. One, Mark Zuckerberg, kept going up the learning curve, realized that he need to change his game, created a diversified and strong executive culture, where all of the executive teams were building in a much more formal business practice, and evolving the organization and its product and service as it went.
And so Mark Zuckerberg, through hiring Sheryl Sandberg and then the rest of the exec team and, kind of, upgrading as he went, learned that. Travis actually misstepped on some of it. He didn't learn, "Oh, well, now we're at logistics infrastructure so we need to be working with, you know, kind of, government and infrastructure, and then we needed to be upgrading our work process such that I'm handing more and more responsibilities to an executive layer." And that's part of the reason why there was an executive change at Uber.
ZAKARIA: It seems to me that there are two places where your advice can be most successfully utilized, the United States and China. Because if you have an idea in either of those countries, you can go to massive scale fast. They are two vast markets, unlike, say, Europe, which is still a collection of countries. And it's not a surprise to me that, when you look at the 20 top technology companies, 11 are American; nine are Chinese.
My question to you is, it seems that China actually follows the Hoffman model even more than America. When I look at China, you see people just in a desperate search to get bigger. The products are often not that great. But they're just moving really fast and breaking a lot of things.
HOFFMAN: One hundred percent. In our book, "Blitzscaling," we call China "the land of blitzscaling." And there's a bunch of things that they can do uniquely because they have a huge work force; they can multi-task products; they have a bunch of capital and invention of different industries. And so there's a lot of things in blitzscaling that I and we have learned from China.
I think, also, of course, Silicon Valley, which says, "Well, how do we do this in a single-threaded way; or how do we do this when we have a limited workforce for doing it?"
So I think it's possible to do in more places than just China and Silicon Valley, but there are two different ways, and China is definitely one of the ones that I and we at Silicon Valley learn from.
ZAKARIA: All right. Reid Hoffman, pleasure to have you on, as always.
HOFFMAN: Always great to be here. Thank you.
ZAKARIA: And we will be back.
ZAKARIA: Between 2013 and 2017 the U.S. was the world's top arms exporter, accounting for 34 percent of total global arms exports. That brings me to my question. What country was the world's biggest arms importer over that five-year period? Was it Egypt, Saudi Arabia, China or India? Stay tuned and we will tell you the correct answer.
My book of the week is Kurt Andersen's "Fantasyland." This is a powerful, well-written book about perhaps the most deeply disturbing phenomenon in America today, the way that fantasy has eclipsed fact in our politics and culture. If you want to understand why this has happened, read this essential book. The answer to my "GPS" challenge this week is D. India was the world's
largest arms importer between 2013 and 2017, according to a report by the Stockholm International Peace Research Institute. Saudi Arabia was the second largest importer globally and was the larger importer of American weapons. in fact, U.S. arms sales to Saudi Arabia increased by a stunning 448 percent in this five-year period, compared to the previous five years.
Thanks to all of you for being part of my program this week. I will see you next week.