First of all, whenever I go to a college audience or a business audience, I always start with what to most people in this room will seem painfully self-evident, almost simplistic, questions. I tell people that you can never understand the world you're living in and the one you want for your children unless you can ask and answer five simple questions: what is the fundamental nature of the 21st century world? Is it a good or bad thing? How would you like to change it? What steps are necessary to change it? Who is supposed to take the steps?

And then over a period of 20 minutes or so, I try to make a case that the fundamental nature of the 21st century world is its interdependence, not just globalization of economics, but information technology and culture and growing diversity and interdependence within all societies.

Then I say, “Is it a good or bad thing?” It is both. It's great for us or we wouldn't be here. It's hard to attack it if you've had the life that Larry and Sergey have built or you’re one of the employees here at Google.

But as you've already heard today, and I'm sure yesterday, half of the world's people aren't a part of this. They're still living on less than $2 a day. And there is growing inequality even amid economic growth in poor and wealthy countries alike.

One of the reasons there is a big reaction in America against more trade is that we’ve had five years of economic growth, a 40 year high in corporate profits, five years of increasing productivity, yet median wages are stuck, and for the first time in this decade, while we've had all this growth, the percentage of people working fulltime falling below the poverty level has increased by four percent. The percentage of people working fulltime who have lost their health insurance for themselves and their families has increased by four percent. And you can amplify those numbers in poorer countries.

So the divide is there, and it's growing. In addition to being unequal, the world is unstable because of our shared vulnerabilities to terror, to avian influenza, to all these problems with which you are quite familiar. And it is completely unsustainable. Not only because of climate change, but because of a related condition that I think is likely to bite us more severely, even before the worst implications of climate change. And that is the accumulated combination of resource depletion and population explosion.

We're going between now and 2050 from a world of 6.5 billion people to one of 9 billion people. Almost all of the growth is in the countries least able to provide opportunity to the people that live there. And at the same time, we see a substantial loss of topsoil, forest cover, probably the biggest disappearance of species on earth, certainly in all of human history, but probably for half a million years. There is a big debate within the professional community about when we're going to run out of oil. Matthew Simmons, no great tree hugger, a conservative Republican and close friend of the Bush family, who has made a lot of money in petroleum investments, believes that that we only have 35 years of recoverable oil left. Now, the Cambridge Research Institute believes we may have 150 years left.

Most optimistic people say we've got at least 100 years of recoverable oil left, meaning if we get all of the oil out of the ground at a net positive energy balance, forget about greenhouse gas emissions for the moment, just how much oil have you got left? The oldest city in human civilization, based on carbon dating, is Jericho in the Middle East. It’s about 10,000 years old. That means that the optimists say, “We've got one percent of civilization left to figure out how to live without oil.”

Seventy percent of oil in America is used for transportation. Except for jet fuel, for which we have not yet found a sufficiently powerful biofuel substitute, we don't need oil to get around at all. We also use oil for plastics, for chemicals, for fibers. Lots of things in our society rest on an oil platform. So we're dealing with not only the potentially calamitous consequences of climate change, but all these resource depletion issues are bearing down on us just as the world is primed for another population explosion.

I come from a farming state, and I lived on a farm when I was a little boy. When I go to places where I work now, once I get out in the country, the first thing I do is kneel down and grab the ground to see what the soil is like, how much of it's there, and what's happened to it.

In the last decade, only Brazil and Argentina have dramatically increased their capacity to produce grain. They have over 20 feet of topsoil, the best in the world. Good for them, but there's no way in the wide world that those two countries can feed 2.5 billion more people. The United States, Canada, Europe, and all of the breadbasket countries in the world have held their own. We've done quite well, but unless you think everybody is going to start eating those little dried space packets, we've got a serious problem facing us.

Question three: how should we change it? We have to go to a set of integrated communities that empower people locally, nationally, and globally. If you believe the world is interdependent, you can't have integrated communities without empowering people, and you cannot empower individuals without more integrated communities. The two things are inextricably linked.

Every successful community, whether it’s Google, the Tennessee women's basketball team, or a family with four kids, a limited budget, and oodles of happiness, every successful community has three things in common. There is an opportunity to participate to the fullest of your ability. There is broadly shared responsibility for the success of the endeavor. And there is a sense of genuine belonging. The last is intangible, but profoundly important.

So much of the modern world is bedeviled by conflicts, confusion, and destruction. When the terrorist bombings occurred in London a couple of years ago, they weren't nearly as damaging in terms of lives lost as on 9/11, but psychologically, they were perhaps more traumatic. Why? Because the United States was invaded. The British terrorists were homegrown. In the British press, there was article after article with people saying, “I don't get this. I worked with these people. They live in our neighborhoods. We'd go to sports events or movies on the weekend. We shared meals. Our kids played together. What happened?” They did not feel that they belonged. Their sense of identity separated them from us and prevented the emergence of community.

Amartya Sen has written a beautiful book about this called Identity and Violence, which I highly recommend to all of you. It's an amazing thing to contemplate how you think about yourself in relation to others. Here in the United States and throughout the world, we have to be trying to create these integrated communities.

How do you do it? Well, of course, there has to be a security strategy. You try to protect people from those who would wreck the enterprise, but as we have seen over and over and get fresh evidence of every single day in Iraq, it is impossible in an interdependent environment to kill, jail, or occupy everybody who disagrees with you. This morning, I met with the leaders of the Kosovar Albanian Muslim community and the Serbian minority as they try to set off on a path to independence to overcome the horrible ethnic cleansing that they were bedeviled by until the late 1990s when we stopped it there.

Also, if you can't kill, jail, or occupy everybody that's against you or might be against you, you have to practice politics. You have to make deals. And that sounds sort of bad until you put it against the alternative.

Remember what Churchill said: “Democracy is the worst form of government except for all the others.” So in an interdependent environment, you can't kill, jail, or occupy all your potential enemies. You have to build a world with more partners and fewer adversaries. As I think one of your previous speakers demonstrated in graphic form, it is always cheaper than going to war.

The single most expensive thing you can do in a modern society is fight. Let's just take Afghanistan and Iraq. I support trying to save the moderate democracy in Afghanistan and trying to prevent the Taliban from, once again, reasserting their repressive rule against women and children and their distorted theocracy, and giving the al Qaeda room to run around again. I don't support our policy in Iraq.

But whether you're for or against either one of them, just think about the money. Afghanistan is a small country. We have already spent over $100 million there. Had we been free to spend it in non-military ways, we could have probably tripled per capita income there. And in Iraq, we are soon going to hit the $500 billion mark. There are about 26 million people there. What about the other 6.5 billion people in the world?

There will be a security policy. We will spend wisely or foolishly. We will be effective or ineffective. But we have to have one. It will involve homeland security and all the things around the world. But it's never going to be enough, because you can't jail, kill, or occupy everybody who's against you or who might be.

The good thing about making a world with more partners is that it’s not only less expensive, we know how to do it. The most successful military operation of the Bush Administration in a Muslim country, with the exception of Afghanistan, if we hold, was the humanitarian airlift in Indonesia after the tsunami. It's the biggest Muslim country on earth, 200 million people. After Iraq, our approval rating plummeted to 30 percent. After the tsunami, it rose to 60 percent. The only thing that happened was they saw helicopters and people in uniform dropping lifelines and food and medicine, and they saw American government representatives helping them to rebuild again. They saw people from our religious and non-religious NGO communities trying to help put the country back together again. It was much cheaper than going to war.

We know how to put the 130 million kids who never go to school in school and to give them adequate learning materials and to use technology to leap generations of traditional educational development, and it's not that expensive. We know how to end extreme hunger, and it's not very expensive. We know how to empower farmers to bring in a crop. And even in the most difficult circumstances, we know how to make a future that skips the destructive energy use patterns of the industrial civilization, and how to do it in a way that empowers people economically.

We know that every increase of cell phone penetration of 10 percent in a developing country increases GDP by six-tenths of one percent, because it creates all these little various entrepreneurs. You know, there's a Steve Jobs or a Bill Gates around the corner there. Some person figuring out, “If I just had a cell phone, I could call and figure out whether these people are screwing me on my farm prices.” You laugh, but it's really true.

This is really important. We know that through individual empowerment and community building, working together at affordable rates along proven paths, we can move towards this world.

We can do it in health care. We can do it in education. We can do it in economic empowerment. We can do it in fighting specific terrible scourges like AIDS. And we can do it in fighting climate change and resource depletion to empower and enrich people instead of holding them back. So we know it.

Last question: who's supposed to do it? Well, we all are. Wouldn't you be better off if we had a different government policy in American on climate change? You bet we would. Should we keep lobbying for it? Of course. Should we sit around and feel sorry for ourselves and whine and point fingers until it happens? No, because private citizens have more power to do public good than ever before.

Are we better off? I think we are now. Susan Blumenthal is here, who was a member of my Administration, and her husband, Congressman Ed Markey. I'm glad he's kind of in charge of our environmental future. I feel better. As Jack Valenti once said, “I'll sleep better at night knowing he's there.”

But do you have to wait for this to make a difference? No. And should you? Absolutely not. People like you have more power to affect public good than ever before. Unprecedented numbers of people are quite wealthy at an earlier and earlier period in their lives, as quite often has happened in human history whenever economic paradigms change. The rise of the Internet as a giving tool has enabled people of very modest means to move the world if they all agree to do the same thing at the same time. After the tsunami, Americans gave $1.2 billion. Thirty percent of our households gave over the Internet. The British, the Dutch, and the Northern Europeans, on a per capita basis, gave even more than we did.

And this is going to be a phenomenon that will only increase in its importance. The linkage is between people who have significant accumulated wealth, and therefore time and access to learn what to do and how to do it, reaching out then to people with less time and less money who collectively could still double, triple, or quadruple the impact of their efforts. The rise of the NGOs provides a channel through which this money can be spent to greatest effect, either in partnership with or in spite of both wealthy and poor governments. So we all have something to do.

Now, I just want to mention this one thing that I think you should think about, based on my own experience. When I started my Foundation, I basically didn't have any money, and I still don't have a big endowment. I have to raise the money to do everything I do, and I don't take any government money. I raise government money for poor countries, but I don't take any. No administrative fees, nothing. In our AIDS project, the only government funds we've taken, to the best of my knowledge, is that the Indian government and the Chinese government have given us office space and a telephone line, which is kind of interesting to be an NGO working in that circumstance. I appreciate that. But I try to organize and expand markets for public good.

Think about that. Even with the Clinton Global Initiative, which Laurene mentioned in her introduction, all I really did was to provide a forum for people to come, a forum like this one, where people can share their thoughts about major problems in the world and what ought to be done, for business leaders, philanthropists, NGO activists from developing, as well as developed countries, and political leaders. The difference is that I told the people with money that if they came, they had to make a commitment to do something. I didn't care how much money they spent or how much time they spent, but they had to do something in one of the four areas we discuss.

We never discuss more than four areas a year. This year we're doing health care, education, economic empowerment, and climate change. We always do economic empowerment and climate change. We have dealt with reconciliation among groups and this whole identity and violence in the community issue, and with governance issues in developing countries.

But then they get to come back, if they make a commitment and keep it. Of the hundreds of people that came the first year, 15 couldn't come back. And about 10 of them actually tried and couldn't believe we wouldn't let them come back. One of them was a particularly generous supporter of mine when I was President. And I said, “You can come to my home for dinner. But this is not about our friendship. This is about the commitment.”

This is a serious process, and it's worked. I want to mention just three specific projects we do, because we do something that I think all of us can do in various ways.

Again, I think you want to build communities and empower individuals. One of the things that people in private philanthropy can do is to help to organize or expand various public goods markets. I could stay here until tomorrow morning giving you 100 examples of things that clearly would be done today by people in authority or people with resources in countries all over the world if they knew the facts and how to act on them.

One of the great things about the information technology revolution is that people who are plugged into it should be more aware of not only how public goods markets work today, but how they could work. With our AIDS project, for example, we now work in 25 countries with 500 people. About 100 of them are fulltime volunteers. The others make modest amounts of money. We are trying to develop models that can benefit not only the treatment of AIDS, but also TB, malaria, other tropical diseases, and maternal and child health. When I'm gone, we will leave behind a functioning health care system.

But the largest number of lives have been saved by the fact that we organized the medicine market. When we started at the beginning of 2003, there were only about 150,000 people in the developing world outside of Brazil where the government manufactured medicine and could buy medicine at reasonable prices, and they gave it to everybody. Today, there are probably 1.7 or 1.8 million people getting medicine in the developing world. At the end of this year, the number may be 3 million or more.

About 6 million people need medicine to live. Because of the Global Fund, the money that the Bush Administration and Congress have put in, other sources of funds, and the reduced price of the medicine, funding is no longer the major barrier.

Generic AIDS medicine was $500 a person a year when I started in January of 2003. But the markets were so disorganized and information was so absent that the first country in which I went to work, the Bahamas, the wealthiest country in the Caribbean, with a fairly sophisticated government, was paying $3,500 for the same medicine. We in America pay $10,000 a year to the big pharmaceutical companies for medicine, but the Canadians and Europeans get the same medicine for $3,500 a year. That's why they're against our reimporting from Canada. Something terrible happens with all that medicine that goes to Canada. You'll drop dead if you bring it back and take it.

The serious point is that the people in the Bahamas were paying for generic medicine manufactured in India and South Africa, the same price that Europeans and Japanese and Canadians were paying for big pharmaceuticals' medicine, seven times the listed purchase price. Why? Because they knew nothing about the market. Everybody was just getting into it, and they were buying through two different agents, and they were being ripped off. The first thing we did, the very first week, was to get them $500 medicine, which meant they could treat nearly seven times as many people for the same amount of money.

That's when we decided that maybe our highest and best use would be to organize this market. So I went around to a bunch of donor countries and got them to promise me a certain amount of money for countries in Africa or the Caribbean, and eventually we went to India, China, and it kept growing to 25 countries. We asked these companies to go from the business plan they were on, which was high margin, low volume, uncertain payment, even at $500, to a low margin, high volume, absolutely certain payment system. We made a separate understanding that in the home countries, South Africa and India, whatever deals we did would go directly to the government. They should never have to go through us to their own manufacturers.

Pretty soon, the average price in the world dropped from $500 to $139. Today, the average medicine price we get is just above $130 a person a year. We are now selling that medicine in 64 countries, the 25 we work in and 39 more that have been qualified as able to properly distribute it. About 600,000 people are getting medicine off this contract now, about a third of all the people in the world who have been added to the ranks of those getting treatment. In addition to that, because this happened, the price structure has dropped so almost everybody now is within 25 percent of our stated price.

The same thing happened with children's drugs. When we started, an annual children's dosage cost $600, because the volume was so much smaller. Because countries were so worried about young adults being wiped out, they didn't have any money to buy the children's drugs. So we had over half a million kids dying every year. If you're born HIV-positive, you only have a 50 percent chance of living to age two if you don't get medicine. You only have a 20 percent chance of living to age five. But if you're properly cared for and you get nutrition, you've got the same chances people with HIV in wealthier countries have to live a more normal life and life expectancy.

So we negotiated the price from $600 down to $190. Then along came the French with UNITAID, God bless them, the little airline tax that was devoted to global health. Other countries joined them, but the anchor of UNITAID is the receipts from the French airline tax. All the money is devoted to global health. They asked us to organize the children's medicine market, because just two years ago, there were only 10,000 kids in the entire world outside of Brazil and Thailand where the government gave the kids medicine, while a half million were dying. I went around and raised the money, principally from some British philanthropists, to double that. So we went to 20,000. Then along came the UNITAID. We negotiated that price from $600 two years ago down to $60, a 90 percent price reduction.

There is no longer a financial barrier to keeping these children alive. I just saw several hundred of them in orphanages and hospitals in Cambodia late last year. They will live now, if but only if, there is a health infrastructure there that will enable us to identify, treat, and care for these children while we're trying to increase awareness. Laurene mentioned a child in Lesotho. Lesotho has the third highest AIDS rate in the world, 24 or 25 percent. They’re trying to become the first country in the world that has universal opt-out testing for people 12 or older. You can say you don't want to be tested, but they come and try to convince you.

A third of the country is unreachable except by foot or on an animal. One of the women who is one of our spokespeople in Lesotho, a rural place, is a woman named Tsepang Setaka, who is about 24 years old now. She became HIV-positive because she was raped. In many primitive cultures, that would be enough to make her just give up on life. People would treat her like it was her fault. It breaks a lot of people still in rural, conservative cultures. I wish this young woman were my child. She goes into these villages and says, “I got the virus because I was raped coming home from school one day. I had two choices. I could just pack it in and feel that there was something wrong with me. But I thought about it, and I don't think this was my fault. I refuse to be a victim. I refuse to give up. I refuse to give in, and you should not either. But you should be tested. You should never do to any other person what was done to me or run the risk of having it done to you.”

She's our best spokesperson, because it almost doesn't matter what words come out of her mouth. She says she's HIV-positive, and they see her standing there strong and healthy and dignified and whole and trying to lift them up.

Paul Farmer is now living fulltime in Rwanda. A lot of you know him from his wonderful work in Haiti, where, among other things, they have not had a tuberculosis death since 1988 in his catchment area, where he treats ten times as many people or more than he has professionals for. The HIV-positive people there take their medicine with greater efficiency than they do in the United States.

So we're trying to develop a model in Rwanda that we can then say, “This works in Haiti and Rwanda. We want to cart this around.” But the point is, we organize markets.

Then we started this development project in Rwanda and Malawi in cooperation with a Scottish philanthropist named Tom Hunter. In Rwanda, in a rural area of 415,000 people, we discovered that the farmers were living in an unorganized market. They didn't know anything about market conditions, and they couldn't even think about marketing their products because there was such a shortage of food, and people were hungry. Keep in mind, the whole country's per capita income is not a dollar a day. These people were really poor.

So we organized the market for fertilizer. We negotiated with European and Middle Eastern fertilizer producers. We essentially said, “We are going to buy three and a half times as much fertilizer as ever before, and we want a cut in the price.” They said, “But petroleum is going up, and we need to raise the price.” We said, “No, we need a cut. We're going to pay you the day you deliver this. You should give us a cut.” So they gave us a 30 percent price break. Then we went to the microcredit financers, and we got a 30 to 50 percent break on the interest rates. Again, same strategy, high volume, low margin, certain payment. Then we worked with the farmers to change some farming techniques. Anyway, in the traditional crops, we had a 300 to 400 percent increase in the first year. We got into crop diversification. We went from hungry people to food surpluses and farm markets, and we're off to the races.

The main thing we did is to organize the market. Now, Laurene mentioned that I was working with Ken Livingston, the Mayor of London, on this large cities project. There are 40 of the biggest cities in the world that have entered into an agreement to jointly reduce greenhouse gas emissions. And Ken asked me to see if this strategy of organizing and enlarging the market would work in climate change areas. First, we’ll see whether we can get some huge volume purchases of easily available energy efficiency products and set up a financing mechanism which will enable cities in the developing world to pay for them quickly. We're going to have our first big conference in New York in May, so stay tuned.

This is something we should all be thinking about. If you're interested in both community building and empowerment, nothing empowers people so much as an organized, efficient, clearly understandable, economic market. Nothing. Then all the politics goes away. Why is Wal-Mart, which is generally viewed as one of the more conservative companies in America, going to reduce its packaging by five percent? Because it saves them, in the supply chain, $3.4 billion and is the equivalent in greenhouse gas emissions of taking 203,000 diesel trucks, which get six miles to the gallon, off the road. They're trying to sell the rest of us 100 million compact florescent bulbs. They are selling bulbs to people who did not know what a compact fluorescent bulb was before they were on the shelves in Wal-Mart. If they sell them all, and people screw them in and use them, it will have the greenhouse gas effect of taking 700,000 cars off the road.

There are all these things we need to be thinking of where we can organize resources in a way that has ripple effects. It’s inherently empowering, every time you do that. The best examples, and by far the easiest ones, are in the area of climate change. I think it's very important to see how and whether we can do this in developing countries. But first, if the United States sets a good example, it persuades first China and India and later other rapidly growing developing countries that they don't have to get rich the way we did. We have to be able to prove that there's an alternative strategy.

I promise you most economic decision makers in the developing world do not know that in the last few years, Denmark has increased the size of its economy by 50 percent and increased its energy usage zero. Not one watt. They also reduced greenhouse gas emissions by producing 22 percent of their electricity from wind.

For the developing world, the most important thing is not wind energy. The most important thing is that they grew the economy 50 percent with no energy increase. Most people don't think that's possible. Would it be better if the U.S. adopted a carbon emission cap-and-trade system? Absolutely. I hope it happens. Should the rest of you hang around waiting for it to happen, using that as a reason not to do anything? Absolutely not. As long as oil's over $50 a barrel, virtually every conceivable clean energy and energy conservation strategy you can think of can be made economically viable in wealthy as well as developing countries. That's the point I want to make. That's what you can do.

If you're part of tomorrow's economy, you know instinctively how to do the two things that we have to do: organize and expand markets and empower people. They are two sides of the same coin, building new communities and giving people greater capacity.

That's what I try to do. Will it work in climate change? Will it work in development in poor countries as it has with AIDS medicine? I'm not positive, but I sure think so. It isn't like we have anything more important to do.

However wealthy you are, and however insulated you think you are from all this, unless you wish your grandchildren to live in a bubble with pumped in air, never seeing a tree, or floating around in an area that used to be land, or looking askance at every single person that passes them of a different race or a different faith, you don't have anything better to do. Besides, it's fun.

Thank you very much.