Welcome everybody, wow, big day and I just want to say a few things to get us started. It is of course a tremendous honor and I should say a thrill to be able to introduce Professor Noam Chomsky to give the formal inaugural lecture here at Karate Hall. I had the opportunity to introduce Professor Chomsky 13 and a half years ago when he gave the inaugural lecture at Gordon Hall. Obviously he's the only person that we deem worthy of giving these kinds of lectures and I am getting my second shot at introducing maybe the one person in the world who truly needs no introduction. I will nevertheless take the opportunity to make a few observations superfluous though they may be. The first is to point out the obvious connection between Professor Chomsky's life work as a public intellectual and the tradition of political economy here at UMass. That is Professor Chomsky has been for over 50 years a firm, powerful, relentless and incredibly effective voice for social, economic, ecological justice and sanity in the United States and in the world. This is of course in addition to his real job, his fundamental scientific research in linguistic, psychology, cognitive science and philosophy. Our economics program and PERI have also been committed to social, economic and ecological justice for almost as long as Professor Chomsky. And the connection is not just that we share these fundamental commitments to human well-being but that at our best we at UMass try to uphold the Chomsky standard of being as honest, relentless and rigorous in our work as possible. Doing anything less means that we are not really doing all we can to advance social and economic justice whatever our sentiments might be. How Professor Chomsky has made his contributions to human well-being is an incredible story of one person putting his very big brain and equally big heart to good use. How UMass economics and PERI came to be what we are is a more convoluted story involving a whole lot of committed, talented and visionary people. This includes many members of the UMass administration some of whom are here right now. That is why Gordon Hall was named in part for our former Dean Glenn Gordon along with the late great political economist David Gordon. We might have even named Crotty Hall in part for our Dean Bob Feldman who was so instrumental in creating Crotty Hall the only problem was that his last name didn't happen to be Crotty. The founders of the UMass economics program as we know it today includes of course Sam Bowles, Herb Gintis, Steve Resnick, Rick Wolf, Rick Edwards and Leonard Wrapping. It also includes Don Katzner who is still going full speed in our program and who has written a great history of our department. Don was not part of the radical faction that came in with Sam Bowles and the rest of the initial group but he was open to this group and he embraced diversity. Without Don and a few others like him the program would never have flourished. And of course the story also involves Jim Crotty. Now Jim Crotty has received a healthy share of well-deserved praise over the past few months with the creation and opening of Crotty Hall and we have seen his head get a little bit bigger each time. But what hasn't been said enough is that the contributions of Jim Crotty and the other founders of the program have created a daunting challenge for those of us that have come after them and are forced to try to live up to what they have created. It's very hard indeed but nevertheless something that needs to be done. All we have to do is look around at what is going on and virtually every other economics program in the U.S. to realize that we truly need to carry on this tradition as effectively as we can. Hopefully that job has gotten a bit less difficult with the opening of Crotty Hall. This is a beautiful new building designed by Professor Sigrid Miller-Polen that should give people in it the opportunity to work hard and flourish. But Crotty Hall also creates a great fallback position even for people who choose not to work hard and flourish. That is all they have to do is not show up at the office and they will be contributing to reducing energy consumption in the building and therefore maintaining it as the first net zero emissions building at UMass and according to our energy engineer only the 20th such building in the whole United States. Before actually letting Professor Chomsky talk I would like to just mention one other thing about him that maybe people don't know as well as his scientific and intellectual contributions and that is his generosity as a person. Some of us have heard stories about all the people that he writes letters to in response and that he's so open to anyone and I can tell you that it's all true because I experienced it and I experienced it first I was 22 and I had just read his book with Edward Herman called The Political Economy of Human Rights and I just wrote him a letter and this is before email and it was a letter and I just sent the letter to his publisher and of course never expected to hear anything back and two weeks later I got like a letter back that was longer than the letter I had written and Professor Chomsky went into detail on all the questions I asked and then some and this again was to somebody he had no idea who I was I was just somebody out there writing him a letter and this is the story that people have told over and over again and the last time when he spoke at Gordon Hall and did also what he's going to do today which is give a second lecture to thousands the last time after he finished I walked him to his car I said well you must be really exhausted and you'll be lucky to get home and get to sleep he said oh no when I get home I'm going to answer probably 85 emails so that is Noam Chomsky and we are so fortunate to have him and his wife Valeria here today thank you very much is it is this working? is it too early to file an application to dedicate the building over there part way through the current experiment with neoliberalism Jim Crotty provided an accounting of the record over at that time two decades of global economic performance since the onset of the neoliberal revolution and I'll just quote the accounting I wish it had been an epitaph but it was just an accounting he said the evidence to date supports neoliberals and critics this is instantly 2003 the promised benefits of neoliberalism have yet to materialize at least for the majority of the world's people global income growth has slowed as has the rate of growth of capital accumulation productivity growth has deteriorated real wage growth has declined inequality has risen in most countries real interest rates are higher financial crises erupt with increasing regularity the less developed nations outside of East Asia have fallen even further behind the more advanced and average unemployment has risen East Asia of course is the region that didn't follow the rules other analysts since have drawn similar conclusions the overall record was reviewed recently and a careful analysis by Mark Weisbrot, Dean Baker, David Rosnick of the Center for Economic and Policy Research they compare the Washington consensus years 1980 to 2005 in their analysis to the prior two decades 1960 to 1980 and they found them quoting that contrary to popular belief the past 25 years 1980 to 2005 have seen a sharply slower rate of economic growth and reduced progress on social indicators for the vast majority of low and middle income countries the latter of course is the anticipated consequence of the neoliberal programs of privatizing state functions and it's not just true of the low and middle income countries we see it very clearly in the United States among the OECD countries the US ranks just about at the bottom of 30 or so in social justice measures, ranks alongside Turkey, Greece and Mexico and there's no need to review the well-known scandal of US healthcare which incidentally is in violation of popular will which continues to the present remarkably to support universal healthcare despite virtually no articulate advocacy of this same stand so quite recent polls once again reveal well recall that these assessments are all they're covering the period before the great crash this is the period of the celebration of the great moderation the triumph of efficient market and rational expectations theory the virtual worship of St. Allen perhaps the greatest economist since Adam Smith and to his credit Greenspan did keep a close eye on the economy in 1997 testimony to the senate banking committee Greenspan recognized in his words atypical restraint on compensation increases has been evident for a few years now and appears to be mainly the consequence of greater worker insecurity insecurity that as he noted was markedly increasing at that time even as employment prospects improved so is deeply rooted Greenspan predicted that these benign conditions of greater worker insecurity would be only temporary and as he put it suppressed wage cost growth as a consequence of job insecurity could not last he was mistaken about that 10 years later in 2007 real wages for non-supervisory American workers were actually lower than they had been in 1979 when the neoliberal experiment the current one was just taking off that's a pretty remarkable record over 30 years I think it may be unprecedented and recall that 2007 was the peak of euphoria and self-congratulation right before the entire intellectual evident edifice crashed to the ground well, other consequences of greater worker insecurity have recently come to light I'm sure you've read about them one of them, an interesting one followed immediately after Greenspan's senate testimony in 1997 that's the dramatic increase in mortality among middle-aged white Americans without college degrees beginning in 1999 recently documented by Ann Case and Angus Deaton it's a phenomenon unknown apart from war and pestilence they have an updated current analysis where they attribute the increase in mortality to despair and loss of status of working people under the neoliberal miracle which are concomitance of heightened worker insecurity another such effect reached international prominence in November 2017 when the same 16 when the same sectors of the population that are suffering increased mortality turned for rescue to their bitter class enemy out of understandable but self-destructed self-destructive desperation and the consequences for working people are now being exhibited behind the facade of Trump, Bannon, Spicer Bluster before the cameras these is the systematic enactment of the Ryan legislative programs which are unusually savage even for the ultra-right and there's probably worse to come as further blows to working people are authorized by the Trump-Roberts court which is soon going to address the Friedrich's case and now with Gorsuch on board we'll probably decide to destroy public sector unions on fraudulent libertarian grounds well just to show how far we've advanced in this respect during the neoliberal era we might listen to the words of Dwight Eisenhower when he was running for president in 1952 here's what he had to say I have no use for those regardless of their political party who hold some foolish dream of spinning the clock back to days when unorganized labor unorganized labor was a huddled almost helpless mass today in America unions have a secure place in our industrial life only a handful of unreconstructed reactionaries harbor the ugly thought of breaking unions only a fool would try to deprive working men and women of the right to join the union of their choice that's conservatism vintage 1952 the days of the golden age of regulated state capitalism so we've come a long way since then well Europe has not been spared the lash of neoliberalism particularly after the 2008 crash which unleashed the austerity programs of the Troika, the IMF, the ECB and the European Commission the severe and harmful effects of these programs particularly on the more vulnerable European periphery have been very amply documented and excellent work by Mark Blith, Yanis Varoufakis and Mark Weisbrot among others and the policies have been criticized as economically absurd even by IMF economists that's IMF economists the IMF bureaucrats in the Troika listen to different voices mainly the northern banks Mark Weisbrot's investigations are particularly interesting he provided, and his recent book failed he provided clear evidence of a political agenda that's guiding the destructive economic policies he did something quite interesting he investigated the reports of the regular IMF consultations with member governments this covers 27 countries for the years 2008 to 2011 he stopped in 2011 because right after that in 2012 ECB President Mario Draghi uttered the magic words that ended the recurrent crisis of the Euro he stated that the ECB would do whatever it takes to preserve the Euro and believe me it will be enough in fact the words alone were enough and the facts were necessary as had been evident from the outset in the years before the magic words Weisbrot discovered what he called a remarkably consistent and disturbing pattern from these IMF government discussions, regular discussions consultations, he found arguments that the crisis was exploited as an opportunity to lock in the neoliberal reforms spending cuts in the public sector rather than tax increases reduced benefits in public services cuts in healthcare undermining of collective bargaining and in general moving to create a society as he describes it with less bargaining power for labor wages, more inequality and poverty a smaller government and social safety nets and measures that reduce growth and employment the IMF papers Weisbrot concludes detail the agenda of Europe's decision makers and they have accomplished quite a lot in this respect over the past five years the agenda is quite familiar here and in fact everywhere where the neoliberal assault has proceeded of course populations would not vote for these so-called reforms as Weisbrot points out and is quite obvious and that requires another element of the neoliberal program to be instituted democracy must be sacrificed on the altar of locking in the neoliberal reforms and the device in Europe is quite straightforward simply transferred decision making to unelected bodies all three members of the Troika including the European Commission are of course unelected at the ideological level there's also an assault necessary the idea that people should have a role in determining their social and economic fate is one of the victims of neoliberal doctrine necessarily that's been revealed with unusual clarity in Europe particularly when the Greek government dared to ask the opinion of the population about whether they agree that Greece should continue to be destroyed by so-called bailouts in fact pass through Greece without impact to pay off northern banks for their incompetence in providing careless and risky loans while Greece's debt burden actually increases relative to GDP and the country is ruined not unfamiliar here either in a different form the reaction among European elites when the Greek government called for a referendum was utter outrage and it got even more intense when the population voted the wrong way and the Greeks were sternly punished for their illusion that democracy might have a place in neoliberal Europe even in the country of its birth the Troika conditions were made even harsher in reaction to this deviation from good order there is of course a public response to the neoliberal assault in Europe has some resemblance to what's been happening here centrist political institutions are discredited public disillusionment, fear, anger are running high sometimes taking quite ominous forms much more ominous in Europe than here in fact those who are old enough to remember the 1930s as I do in fact cannot fail to be alarmed at the rise of new fascist parties even in Austria and Germany of all places and not only there and bitter memories are not easy to suppress when a majority of Europeans call for banning of all Muslims from Europe and many want to reverse the real achievements of the European Union such as free movement of populations and erosion of national borders which is incidentally quite consistent with strengthening of cultural diversity well we can't attribute all of these developments across the west to the neoliberal assault but it is a common and I think clearly significant factor in the US too in the United States too functioning democracy has declined under the neoliberal assault this is these are developments that are revealed with particularly in detailed studies by Martin Gillins, Ben Page, Larry Bartlett couple of other political scientists the results show that the majority of the population about 70% to lower 70% on the income scale are literally disenfranchised that is their representatives pay no attention whatsoever to their attitudes and preferences as you move up the scale you get a little more influence and at the very top policies are set by a fraction of 1% the significance of these results has been further underscored by recent work by Tom Ferguson and his colleagues this is extending Ferguson's investment theory of politics to a new domain congressional elections since 1980 neoliberal years and the studies show something pretty astonishing they show that this is House and Senate they show that campaign spending is a near perfect predictor of electoral outcomes if you take a look at the study it's literally a straight line effect over all of these years these are results you don't find in the social sciences maybe in quantum physics but then it appears to be enhanced by the neoliberal assault democracy which is reasonable because it's implicit in the general principles as you see also in Europe well of course there has been resistance to the neoliberal assault particularly in Latin America the center left governments that took power during this millennium have gone a considerable way towards reversing the lost decades of the revolt of the neoliberal years the structural adjustment years the Washington consensus years one consequence and I think an important lasting one is that the IMF which is basically an agency of the US treasury in Latin America has been expelled it's gone it gives loans to Europe now and also all Europe and its military bases have been expelled from South America even Columbia surprisingly there has been some progress in reversing the harm caused by the Washington consensus programs of the lost decades regrettably there have also been severe failures resulting from caudism, corruption and reliance on an unsustainable capitalist model which as a side effect undermines domestic development so you import, export soy and import Chinese manufacturers which destroys your own manufacturing base so on one of the better records is in Ecuador where poverty has been reduced by almost 40% and extreme poverty by almost 50% along with notable reduction in inequality growth of per capita income substantial increase in social spending and access to health care and education and elsewhere too there have been advances that may be sustainable despite the current regression well not every Latin American country participated in the reversal of the neoliberal assault reforms is there to use the preferred term one prime exception is Mexico which was subjected to a policy decision called NAFTA which had the express purpose literal purpose of locking Mexico in to the structural reforms of the 1980s and the effects happened to be reviewed in a recent CEPR study it finds that Mexico ranks 15th out of 20 Latin American countries in growth of real GDP per person real wages are the same in 2014 when the study ends as in 1994 when NAFTA was instituted the poverty rate has barely budged while in the rest of the region poverty declined from 44% in 2002 to 28% in 2014 and there's a string of other results which confirm the general assessment of the neoliberal programs the modern experiment with neoliberalism was initiated in Chile after the Pinochet coup in 1973 overthrew the Allende government and installed a harsh dictatorship that's called in Chile the first 9-11 took place in 9-11 1973 and what happened is quite informative about what followed worldwide and about the essence of these programs before going into that we might pause for a moment to compare the two 9-11s the first one in 1973 the second in 2001 and the easiest way to compare them is with a simple thought experiment so imagine that in 9-11 2001 the plane that was downed in Pennsylvania had actually reached its target presumably the White House killed the president instituted a carefully planned military dictatorship which murdered some 50-100,000 people and tortured 700,000 and established a global terror center that would of course been far worse than what happened in September 2001 and it is indeed what did happen in September 1973 I've changed the figures only to per capita equivalents which is the appropriate measure well the second 9-11 was celebrated by Al Qaeda it's far more horrendous precursor was also celebrated by the United States government and the business world these are facts worth pondering but let's put that topic aside the U.S. had of course strongly opposed the Allende government and it celebrated the new military dictatorship with enthusiasm among other punishments loans had been withheld during the period of Chilean democracy but 9-11 1973 pulled the cork out of the bottle and there was a flood of loans from the World Bank and private investors the new military rulers were praised by U.S. Secretary of Treasury William Simon for having brought economic freedom to Chile the applause was reminiscent of Washington's reaction to the military coup in Brazil in 1964 that established the first of the neo-nazi terror and torture states that spread like a hideous plague across the hemisphere of the curse reaching Central America in the 1980s John F. Kennedy's ambassador Lincoln Gordon explained that Washington supported the military forces that overthrew parliamentary democracy in recognition, I'm quoting in recognition of their basically democratic and pro-United States orientation those two terms are synonymous while the torturers and the assassins were carrying out their necessary work of cleansing the society Gordon held their achievement as the most decisive victory for freedom in the mid-20th century remember this is the left of the political spectrum that we're talking about the democratic rebellion as Gordon called it he then cabled Washington would also help in restraining left-wing excesses of the former moderate elected government and the democratic forces now in charge should create a greatly improved climate for private investment the bottom line the United States is a global power we mislead ourselves when we tend to focus on a particular area we should think globally and policies and attitudes tend to be consistent worldwide for that reason so we shouldn't be at all surprised at the discovery that at the very same time 1965 U.S. liberal opinion was welcoming with unrestrained joy what it recognized to be I'm quoting the New York Times the staggering mass slaughter in Indonesia that murdered hundreds of thousands of people destroyed the political system and instituted a vicious dictatorship which opened the rich resources of the country to private investment it was a gleam of light in Asia as it was described by New York Times columnist James Reston again at the left articulating the common view and it generalizes you can find case after case which is quite similar well the Pinochet dictatorship going back to that they brought in the famous Chicago boys economists who were trained in the doctrines of the leading proponents of neoliberalism and they had perfect experimental conditions there could have been no objections because of the brutality of the dictatorship that overwhelming support from the hemispheric superpower and the institutions it dominates like the World Bank and furthermore and quite crucially the so-called free market economy could rely on a highly efficient state-owned copper producer which is a mainstay of the economy that the dictatorship didn't dare to touch it's worth remembering in this connection that although neoliberalism proclaims its allegiance to free market and free trade practices quite different as the Chilean example illustrates Reagan was much the same much lofty rhetoric about free markets but quick resort to extreme protectionism to save American industries from more advanced and successful Japanese competitors automobiles, semiconductors and others sometimes these were called voluntary export restrictions where voluntary means do what we say or else as the more recent as for the more recent free trade agreements take a look at them these are at root highly protectionist investor rights agreements well the Chicago boys who had free reign and perfect conditions proceeded to impose the theoretical model that they had been taught and they were visited by leading figures Milton Friedman, Arnold Harberger both of whom made a series of well publicized appearances to promote what they called a shock treatment for the economy Friedman's words shock therapy, rapid imposition of market systems is the only medicine absolutely there's no other there is no other long term solution well the experiment went on for a few years by 1982 the results of the experiment were in completely crashed in 1982 the year of the collapse of the perfect experiment was also the year in which Friedman reissued his classic manifesto capitalism and freedom with a new preface on the triumph of the neoliberal model well in Chile in order to salvage something from the neoliberal wreckage the state had to take over large part of the economy one prominent Chilean economist who studied this carefully Gabriel Palma points out that the Pinochet government ended up with a share of the economy far greater than the Allende's government ever dreamed of basically the whole of the banking system ended up owned by the government and a large share of the real sector as well including export activities manufacturing services and so on this was some of you may remember that this was called at the time the Chicago Road to Socialism Pinochet then recognized the disaster he sacked the Chicago boys he brought in entrepreneurs of the traditional old right to try to set the economy back to some kind of functioning as it does still relying very heavily on copper and in particular there was a post-dictatorship the post-dictatorship years have been mostly center-left governments elite center-left governments which did introduce some improvements particularly during Bachelet's year terms but there's a recent scholarly review just came out a couple of weeks ago which points out goes through the details and points out that none of the reforms dismantled the underlying structures put in place by the military dictatorship and in fact there have been constant and in recent years very vigorous protests public protests over the privatized pension health and educational systems which are failing most of the population most not the very rich and not the military and the police because Pinochet was very careful to ensure that they would be protected by the former state pension system well the Chilean experiment with neoliberalism and shock therapy was soon followed by others the most significant one was after the collapse of the Soviet Union US advisors moved in administered shock therapy in accord with neoliberal principles imposition of privatization decontrol of prices general market doctrines and the result was the familiar one economic collapse loss of about half of Russia's GDP in five years also a sharp increase in the death rate reaching millions of excess deaths in the 1980s and robbery of state assets on a colossal scale largely by the old operatics leading to the corrupt oligarchy and the Putin reaction so that's another grand success and as we've seen hardly untypical or for that matter hardly surprising I mean I began by saying that the Chilean dictatorship opened the first modern experiment with neoliberalism and the reason for the qualification modern is that it's not really new similar socioeconomic regimes have been imposed by imperial powers for centuries pretty much creating the third world neoliberalism's a strange term in many respects it's not new that's not particularly liberal even in the technical economic sense Fidelko's example is perfect and normal case well there's no time to review the historical record which is indeed quite interesting and remarkably consistent what it reveals is that quite generally from England to the United States to Japan Japan incidentally the one country the global south that was not colonized and not by accident the one country that developed and that rejected the neoliberal principles from England all the way through to the East Asian Tigers the countries that have developed are those that simply rejected the neoliberal principles for the United States as I'm sure you know these were advised by no less an economist than Adam Smith who advised the New Republic to follow the principles of sound economics to concentrate on what they're good at what was later called comparative advantage to import superior manufactured goods from England crucially not to try to monopolize the products that they had an advantage in the crucial one of course was cotton the fuel of the industrial revolution and if the policies had been followed the United States would be part of the third world but they were instantly rejected the Hamiltonian model immediately imposed the highest protectionist tariffs in the world that enabled the development of a textile industry of manufacturing later in the century a steel industry and in fact the U.S. also sought and almost succeeded in monopolizing cotton that was critical and the reasoning was very explicit you go to the Jacksonian presidents and Tyler they were quite explicit at the fact that if we can monopolize cotton in England to our feet remember England was the big enemy in those days and if we could only get a monopoly of cotton we could ensure that England would not get in our way would do what we want they came pretty close not quite because England at the time of its own dallying with market principles decided that it would conquer the rest of India so that it could try to gain a substantial amount of cotton and of course also get control of the opium that it could use to batter its way into China which didn't want British manufacturing goods and that's all called free market principles and economic history but that's essentially the typical record goes right on the present the United States was independent it followed England's model of state led development and protectionism what we now call robbing superior technology from others England's case from India from Ireland and the Low Countries the US case from India from England and there was as I say some dallying now and then when it looked as if it would be advantageous these are the countries that were free from imperial domination the countries that were under imperial domination were compelled by force to pursue these doctrines and they became the third world individual cases are quite interesting to look at there's no time but just to take one the United States and two United States and Egypt that were pretty similar in the early 19th century they both had ample resources of cotton the basis for the industrial revolution Egypt was a rich agricultural country that's why Napoleon conquered it Egypt had a developmental leader Muhammad Ali was planning to pursue the course of development that the United States successfully did and that England had done before it but there was one difference the United States was independent Egypt was under British rule and Lord Palmas and others made it very clear that they were not going to tolerate an independent economy in the eastern Mediterranean so they blocked it by force won't go on with the rest of the story but it goes on up to even US intervention in the second world of Europe so Egypt is Egypt and the United States is the United States and there are many similar pairs which are quite interesting to look at so just to take one African historians including British African historians Battle Davidson famous African historian have argued with some plausibility that the West African Ashanti kingdom in the mid 19th century was quite similar to Japan in the level of economic and social development and policy formation and so on again with one critical difference the usual one Japan is Japan Africa is Africa well history is a complicated matter and there are many obscure interactions but these are among the clearest lessons that economic history provides and they're known to mainstream historians so among others Paul Virosh Ampley documents his conclusion that it's difficult to find another case where the fact so contradict the dominant theory as the doctrine that free markets are the engine of growth there have been some notable successes of the modern experiment with neoliberal reforms recall that these were instituted back in the 70s in large part in order to arrest the declining rate of profit which was due to more popular power particularly labor power during the activist years of the 60s and that's been achieved profitability has been restored particularly in the largely predatory financial institutions which have exploded during the neoliberal years and are now even bigger and richer than they were before the 2008 financial crisis for which they were largely responsible and as in the normal neoliberal fashion they are happy to rely on extensive public subsidy there was an IMF study a couple years ago which investigated the profits of the six biggest American banks and concluded that almost entirely from the implicit government insurance policy which is not just the bailouts but access to cheap credit and easy funding and so on incentives to take risky and profitable transactions because you get in trouble the taxpayer will bail you out and so on the business press Bloomberg estimated looking at the IMF study estimated the annual subsidy was about over $80 billion a year which sounds high but isn't really another IMF study found that the fossil fuel industries get about a $700 billion a year subsidy that's free market in the really existing capitalist democracy well but there have been notable successes the financial institutions have exploded they're very wealthy there have been four inequalities increased rate of profits increased and there are other successes that are insufficiently appreciated and should be looked at much more carefully in fact some of them have been studied carefully by political economist Sean Starrs in recent work of his at MIT he points out that international estimates of national wealth in terms of GDP are quite misleading in the era of neoliberal globalization this is an era with complex integrated supply chains subcontracting all sorts of other devices and in this system he discovered corporate ownership of the world's wealth is becoming a much more realistic measure of global power than national wealth as the world departs even more than before from the model of nationally discreet political economies so he did a detailed investigation of corporate ownership using Credit Suisse and other sources and he found that in virtually every economic sector manufacturing finance services retail companies and others US corporations are well in the lead in ownership of the global economy either first or occasionally second nobody else is even close overall US corporate ownership of the global economy is close to 50% of the total world economy notice that that's roughly the maximum estimate of US national wealth by 1945 that was the historical peak of US power well national US wealth by conventional measures has declined from 1945 to the present maybe 20% or so today but US corporate ownership of the world has exploded and the multinationals of course are nationally based supported and subsidized by the national taxpayer so in some respects all is quite well neoliberalism has been a grand success and I can end by quoting the head of state of Brazil's military dictatorship general Emilio Medici in 1971 he said the economy is doing fine but the people aren't which is perhaps the one sentence accounting of neoliberalism Professor Chomsky is going to be giving another lecture at 7.30 so we will not keep him too long but we don't want to abuse your generosity but some questions for now do you want me to call on the people or do you want me to okay David do you see any potentially serious challenges that are not rising at this time in the United States in the world the challenges are very well let me move over let's take the United States one of the most remarkable developments in the last couple of months was the Bernie Sanders campaign which is quite astonishing and I quoted Tom Ferguson's congressional elections but it's much more general for over a century American elections have been bought you can almost completely predict electoral outcomes and policy by simply looking at things like campaign funding and the coalitions of investors as Ferguson puts it who coalesced to invest to control the state it's a remarkably close prediction that Tom's discussed in his book Golden Rule and many other studies this recent one extends it that's over a century and it's been well known so you go back to 1895 the great campaign manager of the day Mark Hanna was asked once what it takes to run a successful campaign he said it takes two things the first one is money and I've forgotten what the second was 1895 long before Citizens United now let's come to last November a guy came up from nowhere no one ever heard of him no corporate funding no wealthy funding the media hated him and disparaged him he even used a scare word socialist which meant basically a real democrat Eisenhower wouldn't have been surprised by his programs but he probably would have won the democratic nomination if it hadn't been for the Obama Clinton shenanigans and managing the party he might have won the election it's a radical break from the American political tradition and it goes beyond thanks to Fox News of all people an account of the most of the relative popularity of political figures in the United States Sanders is way in the lead nobody else is even close and among young people much higher than anyone else well that's the basis for a kind of resistance there are plenty of possibilities and similar things are happening in Europe so I mentioned the quite ominous right wing developments but there are others like Jeremy Corbyn like Varifakis's movement Kim 25 these are all live and well they could respond Latin America was the case that had the most successful resistance there's regression but that's not over so I think there's plenty of possibilities sure so how would you place Trumpism into this story and Trumpism Trump? I think it does trump too much credit to call him neofascist to be a neofascist you have to have an ideology and as far as I can see his ideology is simply me I mean there are forces that he's awakened I mean they're not really awakened they're already there but kind of opened the door for which are pretty dangerous but I don't think I mean in my feeling at least the threat of neofascism is much greater in Europe where it has a history of basis and institutional basis could come back I think what's happening here is somewhat different I think it is pretty much what Casey Leaton pointed out desperation there's all kind of factors one factor is evangelical Christianity which is a huge phenomenon in the United States and it hasn't been it's become essentially the base of the Republican Party the Republican Party went so far to the right that they can't get votes on their actual policies nobody's going to vote for the Ryan legislative program so they've had to mobilize people on other grounds nationalist ultra-religious and so on and that's there but a large part of the slight swing and I was pretty slight in the last election was working class, lower middle class not the very poor but people who lost their hope their dignity, their sense of self-worth see the whole world is against them they're being attacked from below by worthless people who as they see it are being helped by the federal government attacked from above by the rich people who are taking everything don't have jobs their social status has gone mortality is increasing desperation is increasing so they turn to their class enemy, where else are they going to go the Democratic Party abandoned the working class 40 years ago in fact a lot of these people voted for Obama believing the rhetoric about hope and change no hope, no change by 2010 right here in Massachusetts there was already a reversal a lot of union households voted for Brown on the seat that Kennedy had it was quite a change and the studies of their voting showed that a lot of it was just anger at Obama he was attacking their the rights that they had struggled for like health rights and he wasn't doing anything for them so they turned to Brown this time they turned to Trump what's going to be interesting to see could lead to something like neo-fascism I think is what will happen when the congame collapses sooner or later working people are going to see that the programs that are being instituted are directed against them case by case it's kind of hidden behind the bluster but if you take a look at the programs the Ryan style programs that's exactly what they are so sooner or later that game is going to collapse and then what happens probably scapegoating maybe some wild action maybe the kind of thing that could inspire some kind of ultra-right xenophobic movement especially whatever's supposed to be the government goal in the United States such as the Brazil, Russia, India and China were supposed to be sort of countering that the United States are in such domestic messes in terms of just their politics and their economies and again in a lot of these places nobody saw it coming the kind of situation that they're in right now this kind of situation who's in these countries like India and China the BRICS countries yes we have Erdogan in Turkey running right we have Modi in India running right well Russia has the real incentive behind BRICS was Brazil it was Sosoma Rims foreign policy when he was the foreign minister the government actually he's touring around the United States now talking about a very interesting memoir of his that just came out which you might want to look at what's it called global acting globally acting globally just appeared in English it appeared and he discusses a lot of these developments it was very substantially his initiative that began with South Africa at first because Brazil always had close relations geographic ethnic and others with South Africa and it expanded from Brazil and South Africa to India then Russia wanted in China wanted in and they became a sort of an independent plot the United States never liked that now with the takeover in Brazil of the far right government the Tamar government is unbelievable it's trying to dismantle every decent thing that was done in the last years unimposing some legislation which is almost unthinkable like a constitutional amendment which bars any increase in spending for 20 years I mean which is devastating we know exactly what that means so far there isn't much resistance in Brazil but I think it will break out I don't think they can tolerate that what's happened is that the whole South-South effort including BRICS has significantly declined largely because of the loss of Brazilian initiative but this is also true of the institutions that the independent institutions that developed in South America like UNASUR and the most interesting one was CELAC which includes every country of the western hemisphere except the United States and Canada which is quite striking but at the moment it's on hold it depends what happens in the rest of the hemisphere Russia of course is going its own way I mean well just sales along and they're on slow independent policy of trying to create recreate the old middle kingdom basically there were two recent challenges to neoliberalism two recent challenges to neoliberal policies one in Greece the other one in Turkey in my view one in Greece the other one in Turkey in Turkey Turkish movement and both of them are in repeat well first of all I don't think why is this and what kind of lessons we could draw from this well Turkey is a little bit different I think I don't think the Kurdish movement was within Turkey there's Kurds all over the place but most of the Kurds are in southeast Turkey and I've been pretty much closely involved with them since the 90s been there a number of times and so on I think they're just seeking basically cultural autonomy and independence within Turkey they were bitterly, brutally treated in the 1990s there's one of the main atrocities of the 1990s which is almost unknown here for a very simple reason the United States was providing almost the total support where Clinton was providing 80% of the arms for the horrible atrocities that were going on the New York Times of course had a bureau in Ankara which wouldn't report it thousands of towns and villages were destroyed maybe 50,000 people hundreds of thousands maybe millions driven out it was a real awful time you couldn't the children couldn't wear Kurdish colors couldn't talk Kurdish, nothing and in the early part of this millennium there was a reversal and things did start getting better and started improving and Ocalan the official leader the official policy they don't want independence they want some kind of autonomy or recognition they weren't even recognized to be Kurds you couldn't be recognized to be a Kurd you were a mountain Turk and I think this has now reversed Erdogan is carrying out a brutal assault against southeast Turkey and the Kurds it's going back almost to the 90s but I don't think it can do with neoliberalism I think it has to do with Turkey's special effort especially under Erdogan to create a real kind of neo-fascist state xenophobic Islamist gathering power in his own hands he's expelled thousands tens of thousands of people of public servants closed down universities and the Kurds are suffering most harshly on the other hand there is a Kurdish reaction not so much to neoliberalism as to the kind of general repression and that's in Syria and the Turks are very much opposed to that of course but that's a separate thing in Greece as I said there were efforts by the Syrian government to try to to try to extricate Greece from the destructive effects of the programs instituted mainly by the German banks to try to get back the payment for the bad loans they made which is what it amounted to Greece being the punching bag on the way and when they tried they were beaten down as the resources pretty much gave up and has lost most of its credibility within Greece whether they could have done anything else you could debate I mean one of the tragedies was that the Syrian government was not supported by the other kind of progressive movements in Europe of course the United States so they were left alone kind of dangling on the vine and they couldn't do much so the last question I had a question is kind of more what we're doing here how has the privatization of public colleges and universities affected the development of a popular alternative to neoliberalism in the United States well as you know public funding for universities has sharply declined state funding for the state universities going way down tuition have gone way up and I don't think you can find any economic reason for this if you take a look around the world the most successful state capitalist economy in the world is Germany educations free the country that ranks at the top close to the top on all international studies is Finland educations free go right south of the border Mexico, poor country Unam national universities, quite high quality my salaries are horrendous but you have to have a couple jobs if you want to teach but the educational research level is quite impressive it's free take the United States in the 1950s the United States is a much poorer country than it is today far poorer education was basically free the GI Bill offered not only free education but even subsidy to huge numbers of people of course it was racially based you had to be white to get an education which they never would have been able to get themselves it was very good for them it was very good for the country for the rest of those years in fact even private universities were very inexpensive in 1945 I went to college I went to the University of Pennsylvania Ivy League University tuition was $100 a year which was and you could easily get a scholarship you take a look across the board it's hard to imagine that it can possibly be an economic reason for this you can think of reasons non-economic reasons like trapping students they go back to the early 70s and take a look at the elite reaction to the activism of the 60s it's really worth reading closely there are two major publications came out in the early 70s the opposite ends of the spectrum about the terrible time of the 60s it was called the time of troubles you remember and it was a troubling time the country was getting a lot more civilized and that's pretty dangerous you don't want that to happen and there was a reaction from both ends of the spectrum at the right end if you haven't read them I'd really urge reading these things to Lewis Powell who was a corporate lawyer worked for tobacco companies and so on Nixon later appointed him to the Supreme Court he wrote a memorandum which was secret but it leaked it was to the Chamber of Commerce and it was you really have to see the rhetoric the rhetoric is even more interesting than the content but the rhetoric is like a spoiled three-year-old who thinks he ought to have the whole world and somebody took a piece of candy from him that's exactly what the rhetoric is like he says look the business world is being destroyed he says the colleges have been taken over by the far left led by Herbert Marcuse who's organizing the whole university system the media have been taken over by the far left everything's collapsing the business world is a little embattled sector which is being beaten down everywhere he says we don't really have to accept this because if you look at it we're the ones who have the funding we're the trustees, we're the regents we can fight back and defend ourselves from this assault actually it's not just Marcuse the other one was Ralph Nader with the consumer advocacy campaigns this is just destroying the entire free enterprise system so that's from the far right then you go to the left which is more interesting that's the study Crisis of Democracy that came out from the trilateral commission trilateral commission are liberal internationalists from Europe, the United States and Japan it's basically the Carter administration which was staffed almost entirely from that group that segment and their picture is the same the rhetoric is different it's more moderate and civilized and bigger words and so on but it's basically the same story it says the 60s have undermined democracy that's the crisis of democracy the crisis of democracy is that most people are supposed to be passive and apathetic and let their betters ruin things but they're getting out in the streets they're demonstrating women young people, old people farmers, the special interests meaning everybody the American Rapporteur Samuel Huntington authentic liberal political scientist he kind of looks back with nostalgia to the Truman years when he says I'm almost quoting he says Truman was able to run the country with the help of a few Wall Street lawyers and financiers and then democracy was functioning but now we've got all these people pressing the government and too much pressure on the government so we need more moderation in democracy and it goes on to the universities the whole group does Huntington, Foreign Relations there's a problem with what they call the institutions responsible for the indoctrination of the young this is the liberals I'm quoting there are institutions responsible for the indoctrination of the young the universities, the schools the churches and they're failing you can see it from the fact that all these young people are out there demonstrating and protesting and raising questions and so on trying to do something to indoctrinate the young better well, I don't know if you can draw a direct connection but the fact is that raising tuitions and imposing massive debt and so on does have the impact of indoctrinating the young you're trapped I don't have to tell you for obvious reasons and I think all of this is just part of the whole neoliberal policy a collection of ideas that kind of fit together they want to say somebody sat down and spilled it all out but they just naturally fit together and I think what's happening in the universities is part of it well, thank you so much


Everyone, this is theCUBE live in San Francisco for the Red Hat Summit. This is Silicon Angles theCUBE, our flagship program. We go out to the events, extract the signal from the noise. I'm John Furrier, founder of Silicon Angles. I'm Joe Myko, host. Stu Miniman from Wikibon, filling in for Dave Vellante. And our next guest is Paul Comear. The president of products and technologies at Red Hat, welcome to theCUBE. Thank you. And we just talked before we came on. We're old school guys, we're old school, I guess we're older, older than the young guns here in the DevOps world. But man, what a world we're living in right now. 10th year of Red Hat Summit. So much is happening just in the past short five, seven years. Major shift, the sea change is happening, the transformation, whatever you want to call it. It is unearthing, massive innovation, great disruption, commoditization, yet opportunity on the business model side. So really, really amazing. So I want to get your first impression of the show here today. What is the vibe here? And what's that context to this inflection point? And talk about why this moment in time is so special. I think the reason why this is so special is the vibe here. If you look at it, this is really the first summit where on one hand we're saying that Linux has been really the driver of the innovation, but on the other hand, there's all this excitement around the open source technologies that are surrounding Linux. Where there's a lot of talk here about platform as a service, infrastructure as a service, cloud, containers. It's all driven by Linux, but it's all expanding of where open source is really going within the infrastructure. When we first started, I've been at Red Hat for going on 13 years now. When we first started, we used to have this vision of the entire infrastructure being open source. We're here. Think about that, you know? It's more than prime time, it's more than ready, it's certainly been changing. And I remember the days we were going back, talking before we came on, when I was in college, they actually couldn't use the word UNIX because it was an AT&T trademark. They actually called it Xenu, which is UNIX spelled backwards. We know all that we did to use the syntax, but the world that shifted with Linux was really a major, major point. And from there, so much has happened, but now with software, with virtualization, with all the innovations at the hardware level, with convergence, open compute, all these things, it really is a perfect source. I want to ask you, what are you looking at as a product and a technologist leading an open source company and its community, what are you looking at as the killer disruption point right now? Is it the software per se? Is it necessarily the people? All the above? What's your take on that? You know, I mentioned this morning, my keynote. I actually think we've actually gone through one of the killer disruption points. And I think when virtualization got integrated in with Linux, I think that was the inflection point. Because really, you know, when we started, when we started Linux, I'd like to say we were really revolutionary and visionary and we had this whole, we were going to get here. It was purely a commodity play. It was commoditizing the compute layer and Linux combined with x86 did that commoditization. But what happened is all the, all the, from there, all the R and D, all the innovation happened on Linux. When virtualization hit, you could now spin up an operating system in a matter of seconds. And I think that's really the inflection point when things happen. That's when really the inflection point was actually to move to the cloud and where cloud development happened. I personally think that was one of the big inflection points here. The other thing I want to ask you is, is that, you know, the old rap around open source was, hey, you know, it's a cheap alternative to X or Y or Z. Now you mentioned kind of, it's more than prime time. It's bulletproof. You guys have certainly a lifecycle that's supported out in the past decade in some cases with Red Hat. But now you have DevOps, which is essentially a software paradigm, programming infrastructure in context to deploying applications. Now that's pretty mind blowing, right? So, okay, if we believe that DevOps is important, how is that shaping some of the components in the cloud like OpenShift in context to OpenStack? And the landscape around it, you guys still got the competitors, you got alternative approaches, open core, pure plays. How do you talk to customers about that? Because they might not be following the inside baseball of that. If you really break apart DevOps a bit, I mean, Linux started on the ops side, right? So Linux really, you know, leveled the playing field for the operations department to really get a world-class operating system across commodity hardware. The reason why we acquired JBoss eight years ago was for the dev side of the equation. So our developers, you know, our developers said, you know, we started to go out to our customer base and they said, look, we've been running on the Linux platform. Now I have all these developers that have to develop applications. I'm certainly not going to do it on .NET. And so that's where we went with JBoss. And if you look at, take it one step further, you look at OpenShift, we take advantage of features and functions from the Linux operating systems, fixing things like SE Linux, C groups, as well as from the JBoss side. And what's really mind-blowing as we go on, we talk about XPass, we start to bring those enterprise class services like messaging and data caching, things like that, that have been in the software development stacks today. We start to bring those to the PaaS platform. That's what's really mind-blowing. So we're putting together the Linux world, the app server world, and then the services that go with that app server world together on one platform to really change the paradigm. So let's take that through. Let's go back a little bit of history to get to the next question, which is Red Hat, the old days, here's some, I won't say floppy, despaciti roms. Now you're really sure we're in there. So, five and a quarter, and then three and a half. So, but you had to load it, you load it up on the server, it was out in the back room, but then your business model changed to subscription. Okay, that was a genius move. Congratulations on your part to bring that over. But now the cloud offers the same alternative on the vehicle side of distribution. It might not be the younger generation guys aren't, they're not sitting there going, hey, I want to upload patches. They want version control. The modern error is upon us. So, okay, open source is now ready for prime time. So talk about that next opportunity. How do you get that next magic that Red Hat established with your business model that was so successful and certainly celebrated the game? I think what we talked about here at the summit, we're talking about a lot, containers is where that next magic happens. I look at containers as a way for the application to seamlessly get to the cloud. So you think about that. What is the container? What is the container? It's a different packaging paradigm for the application where I now bring in just the right part of the operating system that I need for that application. So I actually link in some of the user space pieces that I need for that application. But the interesting part is that's now one object. So I can now electronically transport that around wherever I want to go. So if you think about today, if you look from a user's perspective to go to one of the cloud providers to spin up a VM, and then they go spin up an ISV application and how they're, or any application and how they're going to do that, it's pretty cumbersome. But now if I have that as one object now that I can move around electronically, changes the game. I really do think, but in people say, wow, well, Linux has adopted. No, Linux has been the adoption, the driving force. We have the containers with us because that the model of the cloud. And so I really think this as big a disrupter as virtualization because it's all about getting the app to the four footprints that I talk about. Virtual, I mean physical, virtual, private and public cloud. And it's going to change a lot from here. And I think this is going to drive that the hybrid cloud even more from here on. So Paul, I want to talk a little bit about the open source ecosystem. You've been involved for a long time. You think back, IBM made a huge commitment. Companies like HP helped drive Red Haps adoption. You look at this show, Cisco gave a keynote this morning. Cisco a couple of years ago, if you told me they were going to heavily embrace open source, I would have been skeptical. Even Microsoft now has found that open source is this great new thing that they've suddenly discovered. And even Oracle is in many ways part of the open source community. How do you see this embrace of open source kind of across the entire software world impacting the community? Well first of all, I don't think you have any choice. If you're going to be in the software industry and you don't know how to traverse an open source you're not going to be in the software industry. And so, but I do think it's changing it a bit because I think as the bigger enterprises come into the open source world we have to really all adapt and we're sort of running things a little. You see them in seeing the advent of consortiums now. And that's sort of a throwback from the olden days when they had consortiums to drive multiple companies together as opposed to a true open source community where the best code wins. And so it's changing it a bit but I just think we all have to be very careful that it doesn't bring it back to where we were in the 80s. We have to be very careful about that. I mean we're still the only company that's a pure 100% open source company. Everything we do on either side of the equation always goes back to the community and that's to us, that's the best model and not everyone, not really most other people don't run that model. Okay, so cloud is under your purview. You know, we've heard a lot today you talked about there's private cloud, there's public cloud and Linux is across all the major public cloud providers and obviously in all the private environments. Is Red Hat in general just agnostic to provide the best solution to all those environments or is there any way that you want to push one vision versus another? No, we think all environments are going to make one environment. And so I think when people started first talking about the cloud there was a lot of talk of people were going to move their entire workload to the public cloud. It's just not practical, it's not practical. You know, we were just talking earlier we come from the same era almost and there's still people running bare metal and people, it's not going to go away. Virtualization as VMware brought it to the market it's almost traditional virtualization now but it's not going to go away tomorrow. And I think all the way across from private to public cloud people are going to be forced and want to run in those four footprints but they want to be able to manage it as one. Even in the public cloud, CIOs are not going to let, you know, if they have an application that's running out in someone else's public cloud and that's the hole that they get broken into CIO is still on the hook for that. They have to be able to manage it even when it's out in the public cloud. So we think it's those four footprints that just melt into one environment and I think that's really the way forward. So do you think with containers we actually have, will this deliver the portability because you know when I talk to companies moving from if I have my test environment in Amazon to get it into my private environment that's not seamless today. I think it depends on how you define portability. So, you know, I think it will really help the portability in those four types of footprints that I talked about but still what's running underneath is still very, very important to give your application a solid platform to run on. All the things we're doing today with platform as a service, infrastructure as a service we're trying to extract all the things underneath to the developer but nonetheless all the things underneath they're still very important for that stable platform. Okay, so we talked to Jim White here some about OpenStack said we have some actual customers that have played production, you know, paid dollars are doing that but a lot of proof of concepts. You know, where do you see the industry needing to mature OpenStack? What needs to be done to have this so that this is an option that we're going to see a huge inflection point in say the next 12 to 18 months? I think more iteration around deployment tools, management tools, things like that more applications getting there more of the ecosystem getting there. Look, this is exactly how Linux started. This is exactly how Linux, everybody, you know I've had a lot of comments well you guys seem to be doing a pretty good job it's pretty easy because we've done it once already and when we first started Linux it was the exact same way we'd put engineers on customer site to get the operating system tweaked just right and then the tools started to grow the packaging started to grow the same things happening with OpenStack it's just going to happen faster it's just going to happen faster because we've all been through it there's more developers on board, et cetera. Paul, I want to ask you a competition question landscape question from two perspectives one is someone leading the organization you have a lot of folks who look to you for leadership inside the organization around making the tough calls right around directions and we're in a very dynamic marketplace a lot of unification a lot of elastic a lot of agile all this all this that's the buzzword drinking game bingo people play but it's pretty serious a lot of money on the table a lot of enterprises have red hat and they want to go to the cloud they see Amazon forcing that change I know you guys have a relationship with them but they also want to look under the hood composite application you mentioned applications really the key to success there so what is the competitive mindset for you guys what do you worry about what do you focus in on to tell your team and then how do you execute that in market from a competitive standpoint a lot of stuff going on around red hat around the trends you guys are riding I think the biggest thing that personally that I worry about is that as open source has become much more mainstream it's disrupting a lot of the traditional players and I worry a bit about the traditional players starting to drag open open source back into the games of the proprietary world that's what I worry about and because we have to be very very careful about that because it's a complicated topic and so keeping it open keeping it one open development community it's really really important and we have to be careful that that's it do you mean the trickery around the proprietary lock-in or is it more market tactics around FUD or both I think it's more market tactics around FUD or both I mean if you look back in history Unix started as an open platform then everyone including the company that I started with DEC that's near and dear to my heart all the companies took it in and put their own isms in and nothing worked they were all different and I think that's what we have to be careful of we have to look at that history and make sure we don't go back to the Unix days of the age well those days are interesting those are best of breed days they all have their own silos HP and the workstation guys made a big part of that so now we seem to be busting those silos now with the environment we're in now are you worried about cloud are you not worried about cloud are you worried about something else what is your opinion? No I think cloud is great I mean I think cloud opens up the whole universe for the applications I think that model is the way to go what I'm worried about is quasi open source offerings that are billed as open source and people thinking they're open source and then getting back locked into that vertical stack that's what we have to be careful of talk about how you deal with complacency in managing this environment because you deal with a lot of new technology a lot of emerging tech you know getting complacent is a thing that could lull you into into a disaster situation the frog getting boiled in the water so to speak how do you manage that? well I can tell you we were just chatting about it I can tell you how I personally deal with it inside of Red Hat I started my career at DEC and I tell the guys in my own group all the time I said look I started at DEC we had the best operating systems the best networking the best servers the best everything and we're not here anymore and so we're not going to let that happen at Red Hat you know we will not get complacent I'm the most paranoid guy on the planet and we're always looking for new angles new opportunities and we're always most of all ensuring that it stays open and that's something we concentrate on let's talk about Microsoft okay you mentioned .NET earlier or someone mentioned .NET the developer market is really hot right now so you guys are a big winner in that with open source and have a lot of success that trajectory with that everyone wants to win the developers win the developer ecosystem constantly hearing everyone talk about you mentioned DEC DEC had VMS Windows has one letter more than that Windows NT it's not a coincidence I know that's why I brought it up it says a little trivia there VMS and one letter forwards what Microsoft wanted to be like VMS which is a great operating system so with Microsoft you're seeing new things coming from them they have seen the leadership change you got Satya Nattella Cloud Guide you see what they've done with open source they've donated reference design on Azure to open compute and some recent maneuvers around being more open at what point do these developer communities have passed like .NET and other ones maybe some say Java right need to evolve to a modern era and how do you deal with that potential change because now with persistent SSDs for instance now we have unlimited potentially persistent memory that changes the operations equation where disk used to be the winner hyperscale the web 2.0 companies so all this is going to go on but the developers are going to be the ones taking advantage of these new technologies so what is this modern developer profile look like in your mind I mean the modern developer profile today I mean and this is I think why Linux is driving a big part of if not all of where it's going because it's about the developer the developer has access to everything the developer today you know developer the past we say you will write in this language you will write in this framework the developer today wants to write what they want to write the framework they want to write in and so that's what you have to support you have to have that capability support the framework that they want to write in Node.js wasn't even around you know it might have been around in cult form five or so years ago but it wasn't anywhere near is today so you've got to be able to support that you've got to be able to have the frameworks that are flexible enough to allow the developer to write where they want to write and I mean in terms of Microsoft I mean I think Microsoft's making some good changes I think you've seen Microsoft much more open I talked about it this morning in my keynote that you know when we first started Linux you know I think Microsoft looked at us as a full frontal attack I think Microsoft has gotten to the point that Linux is in the data center it's just here and that's not a bad thing necessarily and I think I got to give Microsoft credit for that I think I think I think Satya's probably had a lot to do with that and I think that's a it's a good thing so when I say the word data center operating system what comes to your mind? Physical, virtual, public and private cloud that is the data center okay so let's talk about software defined data center so now it brings up all kinds of new software approaches like configuration, automation, orchestration those are important things that necessarily cloud that's on premise right so it could be in the cloud though when you when you go to software that means it could be even look from a storage perspective it's very tough to stuff a storage box down the wire when you want to bring up storage on the other side of that wire right so it's already interrupted No that's good but that's a challenge so as a CIO what should I be paying attention to if I'm saying you know what I have a lot of stuff I'm going to write off I have new potentially migration paths I'm looking at looking at refresh cycles what should I be thinking about what are the top of mind things around architecture and approaches around software defined data center I personally think in the CIOs I mean this is how they think you have to look at it from the application perspective what are the requirements on this application are there uptime requirements are there security requirements are there availability requirements and then you map that into that architecture and how that fits and it might even be different requirements at different times of the day, month, year, et cetera and I think that's really how you have to look at we talked a lot about that today it really is about the application and I think that's what a CIO sort of has to do that top down look So Paul you're very passionate about open source we actually did a survey about a year ago at Wikibon and asked CIOs and infrastructure heads as to how they make their buying decision and about 15% of them said I want open source there's all these battles in the industry about who's the most open is it open source, is it open interface are APIs enough where does that conversation of open fit in with the CIO discussions that you're having and you get Microsoft credit for being more open where's that line and what's open and what's not not too much credit but it's a great question because a lot of people feel that open source is just seeing the code having the code visible doesn't necessarily mean open but not having it visible is closed I mean if you really look across it it's the ability to see the code it's the ability to use the code be able to reuse the code it's the ability for APIs not to be hidden and published and not changed but it's also the ability from a company perspective to support what the customer wants so I'll take it all the way to that end for us so for example we have a management solution called CloudForms we support bare metal we support a VMware environment we support traditional virtualization and we support a Red Hat traditional virtualization we support a private cloud and we'll support multiple public clouds if people want to run VMware we're okay with that we can manage that with our product line that's part of being open as well is given the customer that choice we integrate open stack with vSphere for example if that's what the customers want that's also part of being open as well but what are you most excited about I mean you have a lot of history and I love talking with you because you have that perspective through multiple cycles of innovation ups and downs but right now given we were at today within Red Hat what are you most excited about in the show here is it RHEL 7 is it the developer community and then what are you excited about outside of Red Hat that you're watching I think inside of Red Hat is that I'm most excited about the fact that people are starting to see that the innovation is emanating from open source and so we spent a lot of time where people say oh you're just a Linux company it's just a Linux company well now Linux has driven all that innovation we're trying to kind of prove into the world that we can bring that innovation to the market I'm really excited about that because this feels like the coming out of that because in just one short year you know things like infrastructure as a service platform as a service have gone so much further that's what I'm excited about from here from an industry perspective it's sort of a similar thing because I'm really excited about it's no longer we first started the journey down the Linux path we used to have to go in and convince customers that it was secure, it was enterprise ready it was safe, it's off the table now it's not even a question anymore and now it's just a matter of what more can you bring me to help me solve my problems it's just a given that open source is in the mainstream and Linux is in the mainstream that's what's going to drive us because all that stuff about convincing the people of the world that you know all those other things I talked about secure, safe, et cetera gone, now we just bring them innovation and we know with open source we can just crush it with bringing in more innovation than anyone else I got to say, one thing that's really been intoxicating and riveting at the same time is the whole DevOps movement and watching you mentioned Node, it's been fun to watch that evolution how relevant that's been on the real time side certainly with the advances of JavaScript the client side, it's been pretty amazing but the same thing I want to talk about is the role of data so I want to get your perspective as a guy in the computer science field for many generations not many generations open source generation, it's taking a couple decades data is now, it used to be you store data on disk you put it on the wire you said pump it out to the hinterlands, the data warehouses send some reports, schemas and you've seen the cycles of data but if DevOps is to cloud as dev data, if you want to just call it a new term but the ability to program with data because companies are now becoming data-full meaning they are now dealing with massive data so it's not so much which containers I buy with this and infrastructure and software like Cloudera what not to use for the data data is now a critical asset of their business you're seeing Facebook, LinkedIn, others use their data and Twitter just bought a company today called Gnip you're seeing the analytics and the insight becoming the new plutonium value so in the architecture, where does that fit in in your mind? I mean I think it fits in we talked a lot about the app having the app have the access to that data but the data has, I think the interesting part about the data is the many sources that the data can come from so it used to be, you know the data was from you talked about it, it was on your disk the data can be somewhere out on the net right now that you want to use as part of your analysis on the particular application that you're working for so the ability to access the data in as wide a swath as you can I think that's important the ability to store the data and the ability to retrieve that data I think those are the things that are really driving it but it's about the app having the ability and the access to this data to get things done in real time I mean also that analysis is more and more about the real-time analysis the people that are going to win here are the people that can do that real-time analysis Yeah I'm still struggling I always try and this is something I think about a lot is okay, if the operating system is evolving to be distributed in the cloud and premise the four things you mentioned private, public, physical, virtual, private, public okay and across those pillars if you will, or segments data is everywhere so how does data fit into the new operating system architecture? Well that's where software-defined storage comes into play because your application now has to have access to that data wherever it lives so if data is on one side of the link or the other side of the link you have to have a common storage namespace for the app to really have access to that data no matter where it lives and that's why it's all moving to a software layer I mean, hardware's still going to be underneath but the hardware that's underneath matters less and less and less every day You know what's interesting Stu and I were talking before we came on today and certainly Dave and I, Dave Vellante and I always talk about this all the time is some companies have a lot more marketing budget than others and some have different approaches to competitive strategy in the cloud obviously you see Cloud Foundry you got IBM and HP and others out there but they all have to huddle around the water cooler and they want to call open source if they want to play so you guys are kind of like Amazon you're humble but you don't overspend on a lot of I call it frivolous marketing but most tech geeks look at marketing as frivolous so they say why don't you spend money on marketing but your competition is spending money on marketing so if you had unlimited marketing budget what would you do to get the word out for cloud? I mean, and Red Hat's Mojo the word out I would get out with unlimited marketing is I'd be wary of these quasi open source things that's the message that I would get out how I would get it out is more for the developer out there I mean, let me give you an example I know it's a little vague but let me give you an example when we first did our Paz offering OpenShift we did it out on the cloud we didn't do it as a product we actually had no intention of doing it as a product we started up as a free service for the developer because we wanted the developers and open on Red Hat technologies and after about six or nine months we just got inundated by our customer base saying I want this behind our firewall because they had seen it out in the cloud I mean, that is the way to get your word out it's not unlike open source the best solution wins, put it out there and also one that has longevity too because you see a lot of banks and stuff we're now using open source banks a lot of vertical markets are all adopting the open source so it has to kind of be supported exactly, let's talk about the quasi open source what did you mean by that when you said that you'd be wary of quasi open source can you be specific just to do a drill down on that you mean like open core, you mean just like head fake I mean, I mean, I'll take it right to the heart let's talk a little bit about Cloud Foundry, right let's talk a little bit about Cloud Foundry you got all these Yeah, we love talking about Cloud Foundry You guys are leading me there you're going to get me in trouble Okay, go ahead It's okay, we're your friend the parachute will open, don't worry You see all these big guys you see all these big guys sort of rallying around Cloud Foundry you've got a little pass layer you look at some of these companies and what I've seen is you see a little pass layer that they're all going to agree upon and then it's this big stack of proprietary stuff on top well they're each going to take that proprietary layer and they're going to bring it in and build their own stuff on top you think they're going to interoperate across all of those? Probably not that sounds a lot like the Unix days in the past to me So that's sort of what I mean by that I mean, I've said this for a long time that it's very difficult for a company to draw a line and say everything below the line is open and everything above the line is closed it confuses you, it confuses your employees your developers and your customers Yeah, so Paul I guess we've talked to IBM quite a bit and one of the reasons they joined is to try to keep that open I mean, obviously IBM was heavily involved with you guys early they've been involved in open stack and they're involved with Cloud Foundry so I mean, can't they help keep that solution open? What is the solution? Is the solution the thin layer or is the solution the thin layer that's part of the bigger stack with it? I mean, I think that's I'm not answering that question for anyone I think that's a question you just have to ask yourself It's a good rhetorical question but I'll frame it this way so there's always a line of abstraction where if you abstract away complexity and the functionality is solid, no one really cares if the value is there as long as it interoperates so the one trend we're seeing, let's say Oracle for instance is they have the multi-purpose purpose-built systems fully integrated they call it they want to be the iPhone for the enterprise some customers are buying that That's okay but that's okay if customers want to buy that then I think that's fine and customers should be able to buy that and let the market decide what the right way to go on that is Yeah, we asked Padra this morning from Cisco about her philosophy here and she was great to see her here by the way at Cisco endorsing you guys and being part of the ecosystem again another sign of a big whale like Microsoft's doing on their end Cisco's on their end I asked her, the era of communication is different the old days when the head fakes were going on and the open source community everyone knew about it but the main press wasn't getting it but now with social media everyone's watching It's on Twitter, it's trending So it's hard to pull those old tricks of slowing stuff down in the standard bodies is it? No, it's still possible I just, one of the things I want everybody to just think about that line if you're willing to open up things below the line why are you willing to open up things above the line? What's the reason in the thought process around that? Cannibalization, fear, other things a lot of varieties well, we're getting ready to get the hook from the handlers so I want to ask you one final question explain to the folks out there two things the bumper sticker for the show so the car that's leaving what's on the bumper sticker for this year's Red Hat Summit and why is this point in time so important for Red Hat Summit? I think, as I said, I think this is the coming out one of the coming out parties where open source is really driving the move to the cloud the bumper sticker will take your app to the cloud that should be the bumper sticker coming out of here Okay, Paul, the president of Red Hat technologies and platforms obviously the operating system the future is being developed in the open in the crowd, full transparency and it's going to be fun to watch we love following it on theCUBE obviously great theater for us and benefits to the users and certainly the developers to center the value proposition into the day agile, elastic, flexible whatever you want to call it this is the model that we're talking about here inside theCUBE, live in San Francisco at the Red Hat Summit this is theCUBE we'll be right back with our next guest after the short break