Remarks by Chairman J. Christopher Giancarlo at the Salzburg Global Seminar, Salzburg, Austria
June 24, 2018
It is a pleasure to greet all of you here at historic Schloss Leopoldskron in beautiful Salzburg.
Welcome to the 2018 Salzburg Global Seminar’s Finance Forum on “The Promise and perils of Technology: Artificial Intelligence, Big Data, Cybercrime and Fintech.” It is going to be a terrific program. I look forward to being with you over the next 38 hours.
This year we celebrate two anniversaries. The first was the creation of the Salzburg Global Seminar in 1947 by three Harvard students: one Austrian and two Americans. Like many, they were concerned about the war-time destruction of the European economy and society. They were alarmed at the predations of Stalinism in post-war central Europe. Europe had barely escaped one tyranny and now was facing another. The Harvard students sought to launch a “Marshall Plan of the Mind” to promote the values of free enterprise and liberal democracy. Miraculously, Max Reinhardt’s widow gifted them the use of Schloss Leopoldskron with its own illustrious history as a prewar center of culture and its location secure in the American zone of occupied Austria. Thus, the Salzburg Global Seminar was born.
The second anniversary is of the creation in 1948 of the world’s first stored program computer, the “Manchester Baby”. It was designed as a test platform for the first true random-access computer memory. The Baby had been constructed in a separate building at the University of Manchester and housed in a room that was roughly the same size as Palmer Hall, the room in which much of today’s Salzburg Global Seminar takes place.
Clearly, so much as changed in the 70 years since these two events – so much change in the course of one human lifetime. The post- world war chaos, gave way to the cold war, then the “new world order” and now, perhaps, a return to global threats and multi-polarism. Meanwhile, the average contemporary smart phone now has 500 million times the storage capacity of the Manchester Baby and the average modern laptop computer has 30 million times the processing speed. Today’s digital technology puts us on the verge of what many are calling the 4th industrial revolution, a melding of science and technology with human life and society.
Yet, the more politics evolve and technology advances, the more essential it is for people of goodwill to come together to explore different perspectives and search for common ground. And, as the world’s wealthiest nation, America still had a role to play in supporting such efforts, as it did at the beginning of this one here in Salzburg. For that reason, I am honored to symbolize American commitment to international forums such as this through my service as co-chair of this program.
I am also here in my official capacity as Chairman of the US Commodity Futures Trading Commission (CFTC), the world’s oldest and most experienced regulator of derivatives trading markets. Not only do we oversee the world’s largest futures markets, we are also the world’s only derivatives-specific, national regulatory body.
At the CFTC, we see emerging financial technology as not only a great challenge, but also a great opportunity. Our policy response might be summarized in “five As”:
- Adapt Rapidly
- Adopt Widely
- Analyze Deeply
- Administer Principally
- Advocate Rarely
These responses are simple in concept. Adapting rapidly means keeping pace and not falling behind technological evolution. Adopting widely means seeking to utilize new technology advances in the course of regulatory activity. Analyzing deeply means increasingly effective big data collection and analysis. Administer principally means staying true to the CFTC’s long-standing practice of principles based regulation, especially in a time of rapid technological transformation. Perhaps most importantly, advocating rarely means avoiding any temptation to champion any particular form of technology, market structure or innovation over any other, but to allow market forces and technical innovation to evolve organically.
Let me review our two day program. It begins this afternoon with a great address by Hal Varian, Google’s Chief Economist, followed by dinner and then a fireside chat about the impact of technology on economics and society. Monday will have a series of well-arranged panels, including a discussion of the impact of digital technology on financial services, the challenges it presents for public policy. Then, after lunch, some break out groups will consider individual technological areas. Following our gala dinner on Monday, there will be an engaging debate on the proposition that “technology is tearing trust apart.” Then, on Tuesday morning, we will have a final panel, followed by reports of the break out groups and my closing remarks.
Undoubtedly, our conversations over the next few days will identify a range of concerns over the future of financial markets as well as human society. It may even cause us to consider the future of human nature. This would be for the good. In prior times of rapid technological change - the first three industrial revolutions - the technological innovators were often not the ones concerned with social impact. Meanwhile, the social reformers were often not the technologists. That was unfortunate.
The opportunity for today’s leaders in the current industrial revolution, such as those gathered here together, is to be both prophets of change and protectors of the human condition. As program co-chair, I challenge you to take time in your deliberations over the next 48 hours to consider the impact of emerging technology, not just on financial markets, but on humanity itself.
The first Salzburg Global Seminar took place in a rapidly changing Europe, with a devastating war behind it, threats on its flanks and the computer age on its horizon. The Seminar’s essential purpose was then to champion the cause of economic liberty and human dignity against tyranny and oppression.
Seventy years later, the Salzburg Global Seminar again takes place amidst a changing and turbulent world with a new technological revolution underway. Let us put our minds to work, as our predecessors did seventy years ago, to consider how best to enhance the human spirit amidst the perils and promises of an ever changing world and ever constant technological transformation.