“Inside America there were issues that would affect the whole world. Those issues, unfortunately, were not solved inside America and burst out onto the international scene.”
Ketan Patel is the CEO and the founder of Greater Pacific Capital, an investment firm focused on India and its links to international markets, and on technology, healthcare and financials and services. Greater Pacific Capital (“GPC”) has developed a distinctive platform that invests to support value creation in businesses through the application of strategy and ideas, thematic insights and capital. Patel is also author of The Master Strategist: Power, Purpose and Principle.
The United States stands alone as a unique world power in that it achieved its status without seeking to conquer other lands. It played decisive roles in two world wars, saved the world from communism, facilitated global trade, and created and safeguarded the world’s most vital multilateral institutions. The turn of the century, marked by the 9/11 terrorist attacks, saw a notable shift in America’s stance and role in the world. “It was personal for me because 9/11 was the first working day of my move to New York. And I saw the second plane go in from my office.”
Emanating from scarring events like 9/11 and the 2008 global financial crisis was a rise in populism and an antagonism towards many of the international institutions formed in the 20th century. We will see major shifts as China and India’s economies emerge as global economic powers and assert themselves further on the world stage.
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SPEAKER
Ketan Patel
CEO
Greater Pacific Capital
MODERATOR
Anthony Scaramucci
Founder & Managing Partner
SkyBridge
EPISODE TRANSCRIPT
John Darsie: (00:08)
Hello everyone. Welcome back to SALT Talks. My name is John Darsie. I'm the managing director of SALT, which is a global thought leadership forum at the intersection of finance, technology, and geopolitics. These SALT Talks are a series of digital interviews we've been doing during the work from home period with leading investors, creators, and thinkers. And what we've really tried to do during SALT Talks is to replicate the experience that we provide at our global conference series, the SALT Conference, which has provided a window into the minds of subject matter experts, as well as provide a platform for big, important ideas that we think are changing the world. We're very excited today to welcome Ketan Patel to SALT Talks. Ketan might not be a household name, like some of the other investors that you've heard on SALT Talks, but I think he'll be among the most interesting and informational guest that we'll have on SALT Talks.
John Darsie: (01:02)
Ketan is the author of The Master Strategist and he's the former head of the strategic group at Goldman Sachs. He's worked extensively in the US, Europe, China, Japan, and India principally providing strategic counsel both to public entities as well as private companies. He founded and leads the investment firm Greater Pacific Capital and with his partners they invest in high growth enterprises, making an impact locally in India and internationally in a profitable and sustainable way. He leads the firm's influential research work, which focuses on ideas and policies to engender peace, prosperity, and freedom. That work includes writings about the rise and fall of civilizations, of great power, of the changing and evolving world order, and the shape of the world to come, including mass inclusion and the eradication of slums. Especially in India, which I know is a cause that's near and dear to Ketan's heart.
John Darsie: (01:59)
Ketan also works with the UN World Academy of Art and Science, global leadership initiative, where he leads their project on leadership and the future of finance. He's a member of the Future Capital Group and leads their project on the future of capital. Ketan is of Indian descent, but he grew up in London's east end, as well as spending some time in India during his upbringing. And he actually moved to New York on 9/11, which maybe he'll touch on during the introduction. His grandfather walked on the Salt March and his parents moved to London, which was the center of great power in their early days. He is an avid practicer and practitioner of meditation. It's part of his diet alongside running, art and history, and science fiction. I know that meditation is interwoven into his mindset and his philosophy.
John Darsie: (02:48)
If you do not already subscribe to his great newsletter, I would highly recommend that you do that. You can go to greaterpacificcapital.com, the newsletter is called Sign Of The Times. And, again, I would highly recommend it to get more of the type of perspectives that you're going to hear from Ketan today. If you have questions for Ketan during today's talk, a reminder to enter them in the Q&A box at the bottom of your video screen. And now I'm going to turn over the interview to Anthony Scaramucci, who's going to interview Ketan. Anthony, as you likely know, is the founder and managing partner of SkyBridge Capital, a global alternative investment firm, as well as the chairman of SALT. And with that, I'll kick it over to Anthony.
Anthony Scaramucci: (03:28)
Ketan, I thought I was doing bad on room raider until I saw your background there. And so now John Darsie unfortunately wins room raider again on SALT, but it's one of those rough things for both of us. I want to start with your family of origin because I think you have one of the more fascinating stories and it's such a great success story. So tell us a little about your parents, and your educational process, and how you got to where you are today, if you don't mind.
Ketan Patel: (03:56)
Yeah, sure, Anthony. Hey. Look, first for inviting me. Thanks, John, for that glowing introduction. I don't know how you put all that together, but that was really interesting. Anthony, so as you said, I'm of Indian origin. I'm British, you can tell by the accent. My grandfather would've been a very young man when the British were still running the world. So they looked to Britain as the great power of their day. My grandfather walked on the Salt March. Nothing to do with the SALT Conference, or the SALT Talks, but the great Salt March, which was the independence march led by Mahatma Gandhi. As I understood it, later he was quite severely beaten during that march at some point, too. My parents moved to London for opportunity and my father was an engineer. We were fairly poor and just came to appreciate the hard work that goes into building a family. And came to appreciate and completely love the UK.
Ketan Patel: (04:58)
I grew up in London's east end, which was rough in those days. I recognize some of the waste rights and complaints now. And happening all around the world in the protests, and all the counter protests, and so on is part of my growing up. I also grew up in [inaudible 00:05:13] which is where Gandhi came from and the Prime Minister of India came from. East London, I could admit, was a tough, difficult neighborhood, but I think we learned a lot from that neighborhood. So we did well, we were one of the few that went to college from that neighborhood. I have had careers in industry, and consulting, and in banking, was lastly Goldman Sachs running this group called the Strategic Group. It was fantastic, you travel the world, you meet world leaders and country leaders as well as business leaders. And you talk about the future of the world, and their strategies, and you find the opportunities for Goldman, which were many.
Ketan Patel: (05:57)
So it was a wonderful learning experience. It was also great to leave, though, and set up my own firm was a bunch of friends and more investors. We'll get onto 9/11 at some point, which was an awful time. It was my first day really moving to New York. It was my actual first day. It made me completely empathetic to America and really care about America, and its standing in the world, and really strive to understand what the world was about. And what American power was about and why things happened as they did all over the world.
Anthony Scaramucci: (06:32)
Well, let's go to 9/11, if you don't mind, because I think this is a fascinating part of your story and I think it ties back into context that you can provide about world leaders, Great Britain, its rise, and the eventual rise of the United States after the British empire. But take us back to 9/11, take us back to your first days in New York, and tie that thread from your father's upbringing and liberation of India to where we are now in terms of America on the world stage.
Ketan Patel: (07:06)
Sure. I'm a student of this and fascinated with this topic. So what I've seen as we do the analysis and we look at 30 empires or so in history, and we're about to publish something again on this, but you see that every empire has a curve, a rise and fall. And it's something mathematically you could compute and then you could look at America and say, "When is America no longer going to be a great power?" And I think 9/11 was one of those important turning points where America in my time was the greatest power of all time. It was as far as we could see looking at history, it was the great power. And it was a morally strong power because it had saved the world in two wars, put a man on the moon, it defeated communism, it built all the international institutions we rely on today with its allies of course. It safeguarded the world after the war to look after peace, establish human rights is such an important power for force in the world.
Ketan Patel: (08:09)
And uniquely, it was the first great power not to think it had to conquer people's lands using armies, but it did conquer the world. And it conquered it through investments, through trade, through growth, through its corporations, through investment banks, but it didn't have to kill people in large numbers to do so. So it was very unique and it was clearly something that we all looked at as what we thought was the right way to live, democracy, some form of capitalism, free trade. These were things that were the cornerstones of the building of America. And 9/11 seemed to shake that up a bit, but the 20th century America was the one of raw energy, invention. Anthony, everyone looked at it and said, "This is what we want to be." And it's what lead China I think to start its reforms, of course. I've spent a lot of time in China and looking at policy in China, a little business and investing in China.
Ketan Patel: (09:06)
The 21st century was so different from the 20th century America. You had 9/11, then the global financial crisis, then you had the rise of populism in America, but also [inaudible 00:09:19] in America first. Which to most of us felt like America alone. America trying to break up the EU by encouraging Britain to leave the EU and only offering the deal if they did the trade. America internally divided a horrible ratio denied, too, and now the performance on the pandemic. Now, you can't trace it all back to one event or any event, really. These are changes that sweep over time and they're part of probably the natural cycle of rise and fall of great powers. It was personal for me because 9/11 was the first working day of my move to New York. And I saw the second plane go in from my office. And so it's very poignant. Goldman just said to me you can move back to London or to anywhere else you like and I thought that was wrong.
Ketan Patel: (10:16)
And so I said, "No, I want to stay because we should decide how we live and not the people that did this." So it was an important moment.
Anthony Scaramucci: (10:28)
Well, in your writings you talk about, and I want to see if I get this right, a quadrennial leadership. Is that the right way to describe it, quadrilateral leadership?
Ketan Patel: (10:40)
Yeah, [crosstalk 00:10:40]
Anthony Scaramucci: (10:40)
Quadrilateral leadership. And so you're basically saying there are four powers right now that are tugging on the world in terms of the restatement of the world order. And I was wondering if you could describe that to our viewers and listeners.
Ketan Patel: (10:58)
Sure. So the world has changed and the pandemic has actually highlighted a lot of weaknesses of American system. And we should come back to that, but those lay the ground for so many changes, the change in the relationship between America and China is accelerated by that, the change in the relation between China and the rest of the world. The rise of India at this time is quite significant and especially in the context of the importance of Asia. Again, topics we can touch on, but the quadrilateral powers are fascinating because there are now really four power blocks that really determine where the trade is, where GDP is, where the populations are, where the consumption power is, and so on. So something like 50% to 60% of the world's population, really 70%, actually, of GDP, of [inaudible 00:11:59] land, of all consumption, and the world's industries lie between these four major power blocks.
Ketan Patel: (12:06)
And about 40% of world trade lies with these four, too. So if anyone's going to set the rules of engagement, it's going to be set by the interaction between these four powers. America's had a period where it's managed to call the rules of engagement, and been the one leading the way, and people have been happy to follow, but in the 21st century that changed. And I think it changed with 9/11, but also with more importantly probably with the global natural crisis. And the pandemic in particular has exposed so much of our American system that I think it could be one of the most important turning points in some ways, where people look at America and do not think that America was vulnerable in that way. And so it may be the moment at which the world began to really question the idea of America as the world leader.
Anthony Scaramucci: (13:02)
So let's address that because you've got two Americans on the call with you. We've grown up unfortunately or fortunately in an American centric world, at least from our perspective, but both of us have also traveled the world and we see the way the world sees America. And so take us through your thought process. How did the world see America after World War II? How did the world see America, say, in the 1990s when our old boss, Boss Ruben, was secretary of the treasury? How does the world see America today? And so take us through those time slices in your observation as a global citizen.
Ketan Patel: (13:48)
So as a global citizen, I'd say, firstly, just like both of you, having worked, lived in America, I find myself empathetic, compassionate to America. And as I look across, even before the world wars thinking what was the nature of world leadership, I think America's been a benevolent leader. It is shaken what people thought you had to do to run the world. Because of its innovation, and its enterprising nature, and the nature of its trade, and the relationship its built as this great emerging empire, I think World War II was a moment where it rose to help the world through two of the most important crises in the world. And then as the ideological baffle continued after that war with the Soviet Union, it demonstrated its economic, political, social system, if you like. It was the most powerful system in the world.
Ketan Patel: (14:45)
And it presided over, therefore, a long battle of wits, really. And much more, of course, but wits with the Soviet Union and won. And so all of us grew up I think on this phone call, certainly between the three of us on this panel, of people who saw America as the leader who showed the way. And I think China, all my time in China, I saw China looking at America, saying, "That's what we want to be." And the way to get there is to open up, embrace trade based on the comfort we have. Then open up more of our industries, open up to investment, begin even democracy experiments, which they did, and plot a path to becoming something more like America. And so that was the values of America were the values that the world embraced. Particularly I think at the end of the last century and the beginning of this. And I think that was the cornerstone of what everyone thought was America. At some point, it was clear, though, that that wasn't the only America and America was also in a transition.
Ketan Patel: (15:57)
And inside America there were issues that would effect the whole world. Those issues, unfortunately, were not solved inside America and burst out onto the international sitting. And people saw that America was strong enough to elect a Black president, President Obama, and in some ways put the rest of the world to shame, that no one else had managed to do something so profound as to say anybody could make it regardless of color, or creed, and so on. So we looked at that and thought, "Wow, it seems like that can happen in America." It's a long way away from the rest of us. And then how that then transpired, and where it led to, and the election of the current president for everyone to say, "Wow, that country's different from what we thought." And so if you look at the statistics and there is so much good research done, some of the best is actually done by Pure Research, which is American.
Ketan Patel: (16:54)
More than 50% of the world have favorable opinions still of America. It's very consistent through presidencies. I think it's 54%, but 62%, nearly 70% do not have confidence in the current president and disapprove of America's position on trade, on climate change, on building walls, and so on. So the values of America are beginning to be quite fundamentally questioned. And then you lay on top of that the pandemic and then people start to wonder whether America is actually capable of leading the world. And, again, stepping right back, if we said the world was posed a test, and it was posed to every single country, no matter how small, or how big you were, or how rich, or how poor, how educated or uneducated, whether you were in the north or the ... It didn't really matter, every country gets the same test. Every leader in every country with their leadership group and their system have to figure out how to pulse two parts of the test.
Ketan Patel: (17:59)
You've got to keep your economy going as much as you can and you've got to save lives. And when we do this call, America comes pretty much towards the bottom of the lead table. I mean, that's unheard of. America saved everybody in all these wars, in every crisis. How can America not save its own people economically and from dying? It's just not tenable to imagine that the world power could end up in that place. And I think this is the shock and the dismay of people around the world, that America is so internally divided, and is so populist, and reject some of the tenants of what is great leadership internally and externally. It has not managed to come top of the lead table, when everyone looked to America to lead. I think once you get used to not being led, though, things change. And I think things change potentially forever. And so this is I think the important challenge that America now faces, that in its last great crisis, this one we're in now still, America so far has not managed to lead.
John Darsie: (19:11)
Tone, I'm going to pivot to Asia for a moment and start with China. So you touched on China briefly and for all of our audience's sake, we talked about some of the work you've done internationally, but you have particularly strong relationships in China as well as in India. And obviously you're based in London and you are well schooled on Europe, as well, but when you talk about the power struggle between the US and China, is it a zero sum gain? Is it a winnable struggle for the United States, both from an economic and philosophical governance perspective? And if it is a winnable struggle, what does victory look like for the United States and how do they do that?
Ketan Patel: (19:51)
So it's a tough one now because America began to fight on the recognition that China was a threat to its leadership most probably during the George W. Bush, continued over the Obama era, continued and stepped up during the Trump era. But China has had a decade, decade and a half. And particularly one America was spending time on two wars in Afghanistan and Iraq. China almost had a free reign to go around the world and tie up natural resources, to book relationships to build ports, to freely do that while the superpower's occupied. So the rise of China has been relentless and tying up natural resources and relationships in the absence of real competition has been also relentless. And it's not done from the perspective necessarily of China wanting to run the world. I think it's because recognizes 1.3 billion people, that's a lot of mouths to fill.
Ketan Patel: (21:00)
To feed that many people, to keep stability, to continue their progress, they have to go around the world and take lots of resources and assets. And so if you look at China under communism, it would've had a GDP per capita of $1,000 and then there was a period between 2000 and 2006 where they were already opened up, had entered the WTO, were going through rapid growth, and America recognized pretty much probably as the British did when they were looking at America. They recognized that it was another country that you need to help. And you hop into the system, and you train them in the system, and how it works. And in that period, China doubled its GDP per capita. And then in the late period leading up to the end of the first decade of this century, it was hitting close to $5,000, $6,000 per capita. So it was already doing a really good job.
Ketan Patel: (21:58)
And then in the [inaudible 00:21:59] period, it's gone from $5,000 or $6,000 to nearly $10,000 per capita. Now, America's at $60,000 to $70,000 per capita on average, which masked a lot of people who are nowhere near that, but if that's the average, just as China's [inaudible 00:22:16] a lot, China's probably a hyper power at $25,000 because they're 1.3 billion people. So it's got four times the population of America. To have them on an average of $25,000 means that you're more than a superpower. You have a superbly crafted machine that can weight everything in its favor in terms of trade, economics, probably a good contender to replace the dollar. It's already begun an experiment with an electronic version of the R&B.
Ketan Patel: (22:52)
So this is a serious contender to run the world. And, again, looking back in history, in the wake of every major empire was another great power rising steadily under its wing, ready to take over. And America was that for the British and China potentially is that. Now, you asked a very important question. Can you slow that down? Can you stop it? Can you thwart it? America demonstrated it could do that to the USSR. Could it do it to China? I think it could do because there are clear fault lines in China's political system, its economic system, its over indebtedness. There's an internal divide between the haves and haves not. And of 1.3 billion people maybe only a third, less than that maybe, have actually experienced this great wave of China's rise. And during the pandemic, China's failed to build on the trust that it was slowly trying to build.
Ketan Patel: (23:48)
And so whether it's Europeans, Australia, India, people have spoken out and said we don't trust China. I actually don't think that's good for the world. One way to do this in terms of the way forward would be to find the win-win, where China slowed down a little bit, America was still the older brother helping China to figure out the system. Allow the value to align, which may take two or three decades. And at some point, you have a sharing of power. It seems unlikely that's going to happen. And so there's another way, which is the way that America has tried before, where you exploit the fault lines of a rival and you see if you can break up or divide that country. I think that's going to be very difficult, too.
Ketan Patel: (24:39)
So it's more likely that we end up at a sharing of power between America, China, India, which is rising, again, very rapidly, and Europe, and the EU, rather. So four big power blocks and America's a natural ally for the EU and a natural ally for India. And so in that quadrilateral system, there's three powers that are probably very aligned. Unfortunately not in the last four or five years on the basis of their values and so that needs some serious reselling.
John Darsie: (25:12)
You touched on India and that's a natural transition. Why is India's growth so important for the United States and for the world? And how does it fit in the context of the rise of Asia generally?
Ketan Patel: (25:26)
Sure. I'm going to start again with China on that because if you look at China's growth what you find is China under communism took 50 years almost to get to a trillion dollar economy and then seven years to get to $2 trillion, five years to get to $3 trillion. And all of us look at that and we say of course it's because it's communism, it's autocratic, it's top down. They were bound to do it. It's not in 15 years ago, it's really in the reforms that they did it of course. You look at 20 years ago and you look at India and you say of course they can't do that because of democracy, but here are the numbers. So India under post independence took 50 years while it was still a socialist country, to get to a trillion dollar economy. Same as China's 50 years through communism, seven years to get to $2 trillion. And this is the year where it's set to cross $3 trillion. The pandemic slowed that down a little bit, but [inaudible 00:26:25] turned into five years. So the same curve, so why is that?
Ketan Patel: (26:30)
And I think that's because India for different reasons has urbanization, has a population that's, again, very enterprising, a massive consumer base, massive financial inclusion, about 300 million people opened bank accounts just in the last four years, five years. And so India becomes another massive growth driver of the world. That makes it very important, but I think also importantly if it is a massive growth driver, it is an economic force, then there is another economic force in Asia next to China. Now, unfortunately what that also does is you saw the power of the world move, John, from Europe to America and we see it moving to Asia because you have two countries there that represent nearly three billion people by 2050. And already it's edging in that direction, but Asia is 50% of the world's population. In terms of global GDP, purchasing power, share of trade, world output energy consumption, it's already 40% to 50% of all those things.
Ketan Patel: (27:41)
And by 2050, the projections say 50% to 60%. And it's also by 2050 expected at 50% of therefore foreign investment, financial assets, and military spend. So the access is moving, the big question mark for America would be how do you ally now with the rising powers, given that you've been really the older brother of those rising powers. India's an easy and natural one and long standing relationships with India. Certainly we see so many Indians in America that are successful and you see so much trade between the two.
Anthony Scaramucci: (28:19)
Ketan, can you talk just a little bit about the mega trends that you're seeing in the context of that power structure? And what it means for business and what it means for geopolitics?
Ketan Patel: (28:32)
Sure. So, Anthony, I think we're at a very privileged and unusual time. We're in the transition of great powers. Now, if you take a big sweep of history, and I know that a number of your presidents in the past have spoken about the arch of history and where it's going, but if you really take that and say where are we today and why does it feel so uncomfortable, I think one of the reasons is we're in the transition of real civilizations, from industrial civilizations to an information age civilization. We all grew up with our parents working in factories and our children were working technology, and finance, and services. And so this is a massive transition of just employment, work ethic, knowledge basis. And no wonder it feels uncomfortable because when that happens of course the old power structure hangs on. The manufacturers, the political powers are allied to the land and to production hangs on to power and there's a conflict.
Ketan Patel: (29:31)
So one of the great forces of change is of course that. I think the second is that in the transition, the number of people have gone up. So around the second world war there would've been about two and a half billion people in the world. Today there's seven and a half billion. By 2050, nearly 10 billion. So we have a need to strip more and more resources from the planet. And without enough invention, reinvention for lack of those resources or an access to something else, we're asset stripping the planet. So of course this is an area where you go from it was 6.2 billion I think at the beginning of the century. By 2050, we add another 40% more people. So we're going to asset strip the planet unless we make massive breakthroughs in science.
Ketan Patel: (30:23)
A third big factor is the carbon age is doing everything it can in terms of our ability to create value. Now it needs something else and that isn't probably just solar. There's something else. And at every point of the chance in history of civilizations, there's a breakthrough in energy sources. So it may be something solar, it may be something nuclear that isn't uranium, but something more functional. Something that allows us to put a man or a civilization on another planet that isn't the moon. It's another planet, but it's something much more functional and that happens at every point when civilizations change. I think the fourth is the flow of mankind almost into one culture because the internet, for the first time, we're all connected. Completely connected realtime through the internet. People are watching this in any part of the world they choose to. We communicate with each other through social media, we get our news from social media.
Ketan Patel: (31:19)
We get so much value creation out of social media and on the internet. So we're moving to one culture whether we like it or not. And people will hold back and say, "No, I'm peculiarly not a global citizen, I'm just this." But you're that and a global citizen because of the internet. And then finally we're potentially in the transition of the US is the sole great power to the natural cycle of history of the US sharing the power. Or if it doesn't manage that well, another power taking over. And I've got to say, as somebody who's worked and lived, and has so many friends in the US, and is studying this for so long, there isn't a natural other country to take over. America has this system of enterprise, it has enough of the moral code that is shared by the majority of the world. So there isn't somebody naturally taking over. America will almost have to throw it away and I think populism does that. Populism is very nationalistically micro and it throws away power.
Ketan Patel: (32:18)
And so we're in that stage in history and these are some of the macro challenges. And I'll give you some of the business ones, too, in a moment, but please interject.
Anthony Scaramucci: (32:29)
No, but I just want to follow up on the populism thing because in 1963 Teddy White asked Jacqueline Kennedy what was on the President's bed stand the week that he died. What was he reading? And it turned out it was the Guns Of August by Barbara Tuckman and it rose to become a very big bestseller. And I read it in college and the Guns Of August talks about the systemic rise of nationalism in Europe, which led to the Guns Of August, the advent of the first world war. And the [inaudible 00:33:06] of rhetoric and the reasons why nationalism caught fire. Now, you and I study history, a lot of the things that are going on globally were happening, let's say, 1915 to 1935. And there seems to be a vacuum of leadership around the world, where leaders, instead of explaining what's happening from a historical context and moving populations away from this nonsense are acting like thermometers, Ketan. They're putting their finger up in the air, they're measuring the heat, and then they're reflecting back the heat to their populations.
Anthony Scaramucci: (33:47)
One, do you agree with that? Number two, is there a way to change that? Is there a way to dent history and prevent this rolling catastrophe from happening?
Ketan Patel: (33:59)
So, Anthony, I know you love reading history, so I get completely where you're coming from. I would say this, that despite the prosperity, the peace, and the freedoms created since the second world war, which as I said America's been an enormous part, the EU's been an enormous part, and Asia has followed that lead, we also credit enormous inequity. So there's a real gap between people in the world, between countries, but also within countries. Between those that are real beneficiaries of the fruits of progress and those that are not. So our financial and capital model is not delivered to enough people. Let me just throw out some numbers. So today we have seven and a half billion people. Two thirds of those people are not real participants in the banking system. So it's odd because here's also the numbers a little bit more. So about a billion of a seven and a half billion don't have any bank account whatsoever. Another billion only access credit using their credit cards. So there's some sort of participant.
Ketan Patel: (35:12)
They're paying the 24%, 26% APR interest. Two billion people have a bank account that they've never, ever borrowed from. 3.6 billion people have not gone or not used a bank account physical or any payment system from their mobile phone. So two thirds of the world are not participants or the endpoint beneficiaries of the industrial revolution, of formal employment, and of the financial system that all of us on this call are a beneficiary of. At some point they were going to say not good enough. Now the temptation is to imagine those are all in poor countries. And 85% to 90% of the two thirds are. Let's say you look at a population of a country, it does actually go like that, but 32% of Americans also fall in that category of don't have a bank account, have a bank account they've never used, have managed to get some credit at a usury rate.
Ketan Patel: (36:13)
So that's not right. You can't have a third of Americans not participating in a system. So they were ripe for three things that happened simultaneously. One is, as I said, the backdrop is we're transitioning civilizations or we're transitioning jobs. They're not going to have a high quality job. Number two, the social media connects us all. And number three, populism. So if you have a confusing scenario, you have a lot of people who are unhappy, and you have leaders who see the opportunity to be popular rather than be right, that the truth doesn't matter, but you only tell people what they want to hear. And that gets you enormous power. Then there's always going to be some people who are going to rise to that bait and all across the world people have, particularly in the west, but it is in lots of place. And social media allows you to spread confusion where opinion supersedes expertise. All the fruits of the industrial revolution, we were seeking a better explanation for how the world works to solve problems.
Ketan Patel: (37:24)
With social media, with populism, the truth is masked by opinion. Now, we'll get through that phase. I'm confident we will. And when we do, of course the scenario will get better. But in the transition, until we solve for it, we are where we are. And so today's peace, prosperity, and freedom is under threat from this way of governing.
John Darsie: (37:49)
Ketan, you talk about peace, prosperity, and freedom, and that's really what most of your policy work is centered around. And I want you, if you will, to draw upon your experience growing up in London's east end. We're obviously grappling with a lot of social issues and social divisions in this country, but it's not unique to the United States for certain. In London, there's a different mix of ethnicities and there's race issues, as well. Could you just talk about, again, your experience growing up in the east end of London and how you think socially the United States, London, and elsewhere we can start to create that more integrated global society, where we have fewer inequities, based on things like race and religion.
Ketan Patel: (38:30)
Sure. That's a tough one and a painful one in some ways. So I grew up at a time when Britain was in the aftermath of not being an empire and there was a feeling still of entitlement. We ran the world, feeling was still alive and well. And with the influx of immigration from across the old far flung places of the empire, it also fed, of course, some resentment and the rise of the far right. And there were politicians who were very capable of making sure they threw fire on that and causing problems, lots and lots of problems. And so I would say that the politicians that played on fear, that's what I saw was very dangerous, because there was a fear of the loss of your job. And you know this and I know this because we run businesses. You either grow the revenue line or you keep complaining about the cost. Complaining about the cost is all about the fear. It requires somebody of imagination to grow the pie so that all of us can participate.
Ketan Patel: (39:37)
And so what I saw was the fear was played on. When the politicians played on the fear and played on our differences, in a very practical sense the implication is unfortunately that immigrants are bad. And the consequence is children get beaten up in playgrounds. I would guess since you started to talk about your country or certain people in your country started to talk about Mexicans being bad people, Mexican children are getting beaten up in playgrounds. I mean, the consequences are real and they effect children. And they effect their parents on the streets and it causes hatred and violence, but it takes real leaders not to fall into that way of leading, but to embrace the system. And it's not to say that people shouldn't have borders that they control. Of course you do. You control your border for many, many reasons, but that way of politics was what I saw growing up. [inaudible 00:40:35] was broken, though, in the UK and it was broken because the UK joined the EU and there was influx of Europeans who weren't colored mostly.
Ketan Patel: (40:44)
So people stopped seeing immigrants as always being colored and they saw immigrants of all colors, but lots of white immigrants. And it changed the UK dramatically, but it changed I think the big cities even more. So there was a lot of prosperity. The UK was part of the great trading block just next door. It led to enormous diversity, but also it reversed lots and lots of the hatred and divisions that were there. Unfortunately it came back during the Brexit, where hate, again, became acceptable, politicians again used disparaging language towards minority groups, white and colored. And it's very sad to see, I'm afraid, John. And what I saw was every time you have a politician who thinks that their job is to just lead a faction rather than lead the whole, you have this problem. And the way ahead, I think in some ways, is ever so simple and yet seems ever so illusive right now. It's someone who represents the people, all the people, not just their faction.
Ketan Patel: (41:52)
Here we are today, where politicians are calculating which states am I going to win, what cities do I need to win, can I get a margin on 1% or 2%, just an extra few thousand votes, just in three centers or five. How awful is that, where we've sunk to that, when actually there was a time, and I think it still is the time, for people to say I lead everybody. And we're here to lead the whole population. That's what we need to see in America in the next election. You see somebody step up who says I'll lead you all regardless of whatever you believe, regardless your position, the old industries or the new, whether you're rich or poor. We're here for everybody. And I think the US's problem is you're not united. And the United Kingdom's problem is we're not united. Those are the things we need to solve, really.
John Darsie: (42:46)
Ketan, we're going to leave it with that inspiring message. Thanks so much for joining us. We could talk for two hours about all the different issues facing the world and how to address them. And I hope we'll have a chance to have you back not only at one of our in person SALT conferences, but maybe on a future SALT Talk as well to follow up on a lot of what we talked about. And maybe early next year in 2021 we'll be on a path to maybe leadership that's a little bit more unifying. That would be our hope, so thanks so much for joining us.
Ketan Patel: (43:16)
Look forward to it.
Anthony Scaramucci: (43:17)
It's great to have you on, Ketan. And we'll see you soon. I've got a ton of questions for you, but for some reason every time I leave a call with you I learn more, but I'm also optimistic. I think we can settle these things. I'm confident that we can find that bridge to build things. And thank you again for joining us and we'll see you soon.
Ketan Patel: (43:39)
Thank you very much for inviting me.