Pain, Progress, and Promise
Reflections on the Twentieth Century
John Marshall Law School Commencement Address
McCormick Place, Chicago, Illinois

Sunday, June 7, 1998.

We stand near the finish line of the second millennium Anno Domini. It is a momentous milestone. Yet, except for the fear of mass computer malfunctions—the so-called millennium bug—this landmark seems of little consequence. Clearly, 10 centuries of human history is far too long a period to reflect upon. A thousand years ago, the Sung dynasty was about to dawn in China, the Capetian dynasty was ruling France, and the Persian scholar Avicenna was preparing to write his treatises on the law, medicine, and metaphysics—writings that would influence much of the philosophy of the Middle Ages. While those occurrences may be an integral part in the quilt of human history, they are of little moment for us today.

But we also stand near the finish line of the twentieth century. And the comparisons and lessons to be drawn from the world as it stood but 100 years ago are quite another matter. Indeed, as you receive your law school diploma—you who will fashion and lead the next century—it is not only relevant but highly instructive to take a glance back, scan the highlights of the twentieth century, examine the pivotal junctures that shaped its destiny, and in so doing perhaps glean something about the road ahead.

Perhaps my father summed it up best. Prior to his death in 1990, he told me that even though the horrors of the twentieth century included a new low in the history of mankind—two world wars and the Holocaust, an indelible blot that can never be expunged—he nevertheless felt it was a most remarkable century. In spite of the atrocities, he watched the world go from the horse and buggy (the main form of transportation at his birth in 1904), to Apollo Eleven, which in 1963 took Neil Armstrong to the moon.

Indeed, it is hard to fathom that at the dawn of my father’s century, Britannia was still the empire on which the sun never set; the railroads were in their Golden Age, automobiles were considered nothing but a fad, codeine was touted as an excellent cough syrup, the phonograph was the most popular form of home entertainment, life expectancy for the American male was 48, and the death of Queen Victoria assured that the Victorian age was in its final act. Oscar Wilde, Friedrich Nietzsche, Giuseppe Verdi died, but Louis Armstrong, Humphrey Bogart, Spencer Tracy, and Thomas Wolfe were born. And in Europe, Sigmund Freud published his Interpretation of Dreams, unlocking the mysteries of our subconscious, and Albert Einstein, the foremost thinker of the century, published his famous three papers, which included his special theory of relativity that forever changed the destiny of mankind.

From the beginning of the century, there was extensive testimony of its message of hate and violence. In France, the Dreyfus Affair (1894) had reared the ugly head of prejudice; in the U.S., the Supreme Court delayed genuine civil rights by embracing the separate but equal doctrine in Plessy v. Ferguson (1896); the Spanish-American War (1898) had begun with its cry to “Remember the Maine”; President William McKinley was assassinated (1901); and not much later but a continent away, the barbarous two-day Jewish pogrom in Kishinev occurred (1903); the Russo-Japanese War (1904) broke out; followed by the bloody rebellion in St. Petersburg (1905) which rang the bell on what was to become the Russian Revolution a decade later (1917).

There was evidence also of cultural enlightenment. Emmeline Pankhurst lit the torch on behalf of women’s right to vote (1903); the modern version of the Greek Olympic Games were reborn after being missing for 3,000 years (1896); and the Boer War finally ended. Then in an unconnected burst of innovations whose social value some might question, Picasso entered his “Blue Period”(1901); Boston defeated Pittsburgh in the first World Series games (1903) ever played; the theory for IQ tests was introduced (1903); the concept of the Boy Scouts was fashioned (1907); and the Count of Monte Cristo, the world’s first motion picture, was produced in Hollywood (1908).

In addition to Einstein, there were other strong signals that science and technology would force its way unto center stage. Russia had begun construction of its colossal Trans-Siberian railroad (1891); Guglielmo Marconi took out his first patent for the radio (1896); J.J. Thompson detected the electron (1897), proving the ancient Greek theory that atoms were at the foundation of matter; Max Planck proposed the quantum theory of light (1900); Gregor Mendel’s discovery of how inherited traits are passed was finally accepted (1900); Walter Reed conquered yellow fever (1902); and Wilbur and Orville Wright changed human transportation forever at Kitty Hawk (1903).

That was the stage setting, so to be speak, for the production known as the twentieth century. Looking back, we can see that the play wright provided plenty of clues for what was to come. Accordingly, it is highly instructive to look around us today for a sneak preview of what we can expect tomorrow. However, one of the most profound events that would direct much of our present century occurred long before it began, back in 1848—smack dab in the middle of the nineteenth century. In that year, Karl Marx and his associate, Friedrich Engels, published the Communist Manifesto. Its goal was novel and even noble: “To create a new society where there would be a fair and equitable distribution of wealth, ending the vast disparities between the rich and the poor.” The concept of Marxism, more commonly known in practice as communism, would dominate the political thought of Europe and later Asia for most of the twentieth century.

Today, some 150 years after the concept was conceived, we know it to have been an unmitigated failure. The truth was officially flashed to the world in 1990 at what seemed like another traditional May Day celebration in Moscow Red Square. As usual, all the government top brass were present, as usual there were banners and marches and songs, as usual there was all the expected pomp and circumstance. But something was drastically different. It was the banner! “Communists: have no illusions — you are bankrupt,” it blatantly proclaimed — right there, in the middle of Moscow Red Square, on May Day 1990!

Indeed, those of us, citizens of planet Earth, fortunate enough to be present in the final decade of the twentieth century, have been privileged to witness events equal to any celebrated milestone in the history of mankind. In what seemed like a made-for-TV video, we were ringside spectators at a global rebellion. In less than an eye-blink in terms of world history, the Berlin Wall fell, Germany was unified, apartheid ended, Eastern Europe was liberated, the Cold War ceased, and a doctrine that impaired the freedom of three generations, wrecked the economies of scores of nations, and misdirected the destiny of the entire planet for seven decades was decisively repudiated.

What a magnificent triumph of democracy and freedom. What a glorious victory for capitalism and free markets. What a majestic tribute to Thomas Jefferson, Adam Smith, Abraham Lincoln, Friedrich Hayek, and Milton Friedman. What a divine time to be alive. Surely these represented the defining moments of the twentieth century. But let us be clear: What transpired was not the result of a single influence but rather of a multitude of forces. Nor did the wildfire of freedom we witnessed occur by virtue of a random spark. The underground flame took years to overpower the forces of tyranny. It was fueled by some universal truths: that fundamental human rights cannot forever be denied; that totalitarianism is evil; and that an economic system based on central planning is vastly inferior to a market-driven economic order.

Still, if there is a single lesson to be gained from these events, it will not be found in the political or economic arena but rather in the sciences. For it is axiomatic: Human events are but links of an unending chain forged to the greatest extent by the inexorable march of science and technology. Ironically, the lynchpin of all that occurred was devised precisely 100 years after the Communist Manifesto, on December 23, 1947—smack dab in the middle of twentieth century. For on that day, two Bell Laboratory scientists demonstrated a device made of strips of gold foil, a chip of semiconducting material, and a bent paper clip that could take an electric current, amplify it, and switch it on and off. They had invented the first transistor. It was the birth of a technology that would serve to dominate the balance of this century and much of the twenty-first century as well. The Digital Age was upon us.

Transistors and their offspring, the microchip, transformed everything: the computer, the space program, the television, the calculator, the automobile, the telephone, and, to be sure, telecommunications. We had migrated, said Walter Wriston of Citicorp, to the “information standard.” Modern telecommunications capabilities fostered instant mass informational flows in total disregard of internal prohibitions or national boundaries. This proved to be the common denominator for the dramatic upheavals we witnessed. Modern telecommunications gave everyone the ability to make a stark, uncompromising comparison of political and economic systems. Everyone had the ability to judge their government, compare their economies, scrutinize their moral codes, examine their individual freedoms, and weigh them against that of their neighbors. The truth could no longer be hidden from the people. Thus, as it has throughout the history of mankind, science and technology again dictated fundamental reform in our social structure and reshaped both the political and economic landscape of our planet.

In a very real sense, the technology of the twentieth century moved mankind from the vast to the infinitesimal. It is a trend that will surely continue. In physics, this century began with the theory of General Relativity; this dealt with the big, with the universe. From there we journeyed to comprehension of the little, of quantum physics. Indeed, physicists have now decoded nature’s age-old secrets, bestowing upon the world perhaps the single greatest achievement of the human mind—the atomic theory. Similarly, in biology we also moved from macro to the micro—from individual cells to gene engineering. This led us to the discovery of DNA (deoxyribonucleic acid) and provided geneticists the ability to manipulate cells, where the ultimate secrets of nature reside. We entered an era where we can probe the fundamental components of life and, among many things, remedy mankind’s most distressing afflictions.

And even in the world I represent—the financial markets—the evolutionary process was strikingly similar. When financial engineers applied advancements in computer technology to established investment strategies, market applications went from the big to the little just as in the sciences. Charles Sanford, the former chairman of Bankers Trust, dubbed it “particle finance.” The idea was to take every form of finance and investment—from alimony to zero coupon bonds—and break them up into tiny bundles of risk for trade. Derivatives, the financial counterparts to particle physics and molecular biology, were born. One might even say that the Scottish-cloned sheep “Dolly” is the biological equivalent to its financial cousin, the interest rate swap.

Clearly, Planet Earth itself went through the miniaturization process. We call it globalization. As a consequence, today, for the first time in human history, nearly every country on the planet has a market-oriented economic system and is attempting to be a competitor in the global marketplace. For the past 20 years when we spoke of a global economy, we were talking about only 25 percent of mankind—mostly North America, Western Europe, and Japan. As recently as 1988, almost 70 percent of mankind was living under Marxist or socialist economic systems. Suddenly, there are 3 billion more participants in the capitalist system.

This has spelled unequaled opportunity for Americans and made our nation the unrivaled leader of the world. Among the many effects, it produced the current strong U.S. economic climate and our dominant position in financial services. But leadership has brought us burdens and responsibilities as well. Bosnia and the Middle East are but two examples. China and India are two more. And globalization also means competition. Contrary to what our Washington officials are publicly saying, the financial union in Europe, should it be formed (between Germany, France, Italy, Spain, Portugal, Austria, Belgium, the Netherlands, Luxembourg, Finland, and Ireland), will produce an economic giant equivalent to the U.S. in population, output, and trade. By introducing the euro (with Britain, Sweden, and Denmark poised to join in 2001), Europe may alter the financial map of the next century.

There are also other ramifications of globalization. The rise in financial assets led by the American stock market may have created a global financial bubble. If so, when it bursts, the effects from the fallout may be staggering. Of equal concern is the fragile nature of emerging economies throughout the world, economies that were not devised for the stresses of the open marketplace. The rapid flow of capital to nations that are still mired in nepotism, corruption, or an old-boys’ network—to systems without free market structures, without cash market capabilities, without transaction transparency—sets the stage for more economic turmoil such as recently transpired in Southeast Asia.

And globalization has its dark side as well. It has unleashed a tide of nationalistic fervor that is as dangerous as it is infectious. The experience in the former Yugoslavia taught us that ethnic cleansing did not die with the Nazis; nor is what happened in Rwanda anything but an appalling example of genocide. Moreover, the rise of fundamentalism represents a serious menace to the next century. We can coexist in a global environment only if there is flexibility and compromise. With fundamentalism there is none. Furthermore, the gap between the “haves” and the “have-nots” continues to widen both within nations and internationally. Ultimately, this could produce an explosive condition. When you add to this mix the fact that the modern technology has made democratic societies highly vulnerable to cyberspace terrorism, and that weapons of mass destruction are present and available to rogue nations, or to those with traditional enmities, or to villainous opportunists, you must conclude that our world is as dangerous a place as it ever was.

Still, in stark contrast to the signals at the turn of the last century, the evidence today is overwhelming that the next century will be dominated by the information standard. As Dr. Carver Mead of the California Institute of Technology stated: “The entire Industrial Revolution enhanced productivity by a factor of about a hundred, but the microelectronic revolution has already enhanced productivity in information-based technology by a factor of more than a million”—and you’ve seen nothing yet! Today, millions of transistors are etched on wafers of silicon. On these microchips, all the world’s information can be stored in digital form and transmitted to every corner of the globe via the Internet. Thus, the Digital Revolution will impact the next century just as the Industrial Revolution directed much of the nineteenth and twentieth century. Or to put it as Harry Seegers, chief executive of GE Information Services, said, “Information technology will be to the twenty-first century what electricity has been to the twentieth century.”

Indeed, the Digital Revolution will change the way we live, work, and play. Everyone will be wired, carrying small pocket devices that can be used to communicate, or as a computer, or a fax, or to download money. Tiny chips might even be implanted in our bodies that could act as a universal credit card, passport, or driver’s license. Telephones as we knew them will be history. Wireless e-mail in the twenty-first century will be the dominant personal telecommunications instrument. Surely national and economic borders, which have already been blurred, may dissolve completely, as communication satellites enable consumers to do transactions in cyberspace.

And perhaps it won’t be long before there is one world currency—digital money. Yes, instead of storing value on paper, the twenty-first century will surely allow us to put money into electronic digits. It will be more portable and certainly smarter than its paper counterpart. It can be stored in your laptop, on a credit card, or on a chip implant in your hand. And because digital cash will be highly compliant, you will be able to control it much more precisely than paper money. Not only will the next generation of law students receive their allowance on e-mail through the Internet, it will come programmed as how they can spend it—so much for food, so much for books, so much for beer.

Finally, in the Age of Cyberspace we can envision an enormous shift of power from producer to user. Technology is a force for democracy and individual empowerment. The consumer will become king because the Internet changes the old rules. Consumers who don’t like what they see will just click, delete, and move on to the next screen. Those corporations that are currently merging and are betting that bigger is better may be looking in the rearview mirror and could be completely wrong. With the cost of entry lower and easy access to the global marketplace via the Internet, competition will come from smaller entities with a flexibility to offer innovative services. In the past, success had a lot to do with real estate; in the future, where you are located may not matter.

So there you have it: the pain, the progress, and the promise of the twentieth century. It would be grand to tell you that we have learned from our mistakes, that we will not repeat them, that only enlightened times await us, but I am afraid that would be a bit Pollyannaish. Still, there has been great progress and the future looks brighter than it ever was, even if somewhat formidable. Indeed, if what lies ahead sounds a little scary to you, then you are realistic and have learned well. And if as lawyers you see vast challenges and great opportunities, then John Marshall has done a good job. Congratulations and good luck.

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