Herbert E. Meyer served during the Reagan administration as special assistant to the director of Central Intelligence, and vice chairman of the CIA’s National Intelligence Council. He is widely credited as having been the first senior official to predict the fall of the Soviet Union. He’s also, written a number of good books (including How to Analyze Information: A Step-by-Step Guide to Life’s Most Vital Skill, and The Cure for Poverty: It’s the Free Market: History’s Greatest Invention), plus he often speaks to groups of business executives.
Recently he took time out of his busy schedule to sit down across a Skype connection with me, at the hinge point between 2012 and 2013 to reflect on intelligence, forecasting, what he saw in the 1980s which others did not, and what he sees coming next, which might be even bigger than the fall of the Berlin Wall.
I suggest you set aside some time to listen to the whole discussion (more of a thinking session than an interview), but in case you don’t have time, I jotted down some notes hitting just a few of the highlights from the conversation. These are notes, not perfect transcriptions, so they sometimes paraphrase a bit. For the real unfiltered thing click on this link.
Regarding the CIA and its inability to see the fall of the Soviets:
· They (that is most of the intelligence community) saw the Cold War as a permanent feature of the world. But Reagan came along and said, ‘wait a minute, the Soviet Economy is on the verge of implosion.’ The ‘establishment’ said the Soviet Economy would go on forever.
· The CIA had been built to monitor Soviet strengths, but nobody was looking at Soviet weaknesses.
· The key to it is to know what you’re looking for in order to find it. Until we asked ‘can the Soviet Economy be sustained?’, nobody was looking in that direction. We had our people look for intelligence about Soviet weaknesses. The weaknesses were overwhelming the strengths.
· It never occurred to anyone that the Cold War would end, so we were playing defense. From the end of WWII to the 1980s the world was playing defense.
· Reagan came in and said we don’t want to just not lose the Cold War; we want to win the cold war.
· “In the Cold War, we instructed our spies: ‘If you find something like this (whatever we thought was important to identifying signs of Soviet vulnerability), don’t throw it into the wastebasket, send it to us fast.’ We knew that if nothing comes in through that channel, either our theory was wrong or our collectors were incompetent. They got us all kinds of stuff that no one was looking for. If you’re back channel becomes crowded then your theory is probably right.”
· It just never crossed these people’s mind that the Soviet Union was unsustainable. They had those ideological blinders on. They viewed President Reagan as so stupid because he felt intuitively that their system could not be sustained.
· Gorbachev gave it his best shot; it couldn’t be reformed, and that was his great failure. He said it could be made to work better and that simply was not true.
· At one point Reagan had said that he wanted a private conversation with Gorbachev…he said to Gorbachev, “What’s the difference between a communist and a scientist?” “I don’t know,” responded Gorbachev. Reagan smiled and said, “A scientist would have tried it out on rats first.” I think that’s when we won the Cold War, when Gorbachev realized he wasn’t sitting across from the idiot he’d been told he would be dealing with.
Regarding intelligence gathering in general:
· Before 9/11 intelligence services never made a list of things to look for as if Al Qaeda were in the U.S. and trying to attack us. When the FBI noticed young men learning to fly planes but without learning how to land, there was no one waiting for that.
· The crucial intelligence skill is the ability to spot a pattern with the fewest possible facts. You’ve got to have people who can make that intuitive leap. They’re all over the place…they’re not in our intelligence services.
· The key intelligence skill is that you have to know what you’re looking for in order to find it. The notion that you have to keep looking at data endlessly waiting for something to pop up is nonsense, it’s just noise.
Regarding organizational leadership:
· The first rule of organizations is that first-rate executives hire first-rate executives. President Reagan was a first-rate executive and he brought in a varsity team: Bill Casey, at the CIA, Cap Weinberger at defense, Jeanne Kirkpatrick at UN and they hired first rate executives themselves.
· He understood something that a lot of CEOs don’t. To accomplish your objective you’re going to have to work very closely with people you’re not very comfortable with and don’t want to hang out with. You don’t have to want to hang out with these people to work closely with them. He had his own friends. In contrast, and I don’t want to overstate this, but The George W. Bush people were a bunch of frat boys. It was as if they thought that ‘If I’m not comfortable with you, I don’t want you here.’ They were good guys, but they were all the same. You see this mistake in corporations all the time.
· You hire the talent and point them to the objective and get of the way.
· You remember that people have different skills. President Reagan, for example, could do things no one else could do, whether it was standing in from the Berlin Wall and telling Gorbachev to tear it down…but he couldn’t name all 25 members of the Politburo. He probably couldn’t name all the members of his cabinet and he saw no reason to clutter up his mind with such detail.
· He would not make any decisions which could be made by anybody else. He would only make those decisions which only he could make.
· The chief executive shouldn’t be that busy. When I see a chief executive who’s buried in paperwork at ten o’clock every night, that guy doesn’t have a grip on it. The CEO should be sitting there with his feet up on the desk thinking, figuring out strategically what to do next.
Regarding the next big world event that no one is paying attention to:
· When you stand back from all the yelling and the screaming…you can see what I believe is the most important trend in the word…the world is emerging from poverty fast. This is the biggest under-reported news story in the world.
· By 1980 or 1990 about two billion human beings were out of poverty, since then another half billion have crossed the line out of poverty; a lot of them in India and china. In the last six years 20 million Brazilians have emerged. When you put all these numbers together…each year between fifty and one hundred million human beings are leaving poverty behind.
· If we can continue this trend within our lifetimes, and certainly within our children’s lifetimes, the overwhelming majority of human beings will no longer be poor. This is the biggest thing that’s happened in the entire world.
· By the way it’s going to be a five billion-person middle class. This will become the most powerful force in the world. Their demand for our goods and services will set off an economic boom…I believe that we’re heading for not just a sonic boom, but maybe a supersonic boom.
I’m not sure I agree with everything Herb Meyer said in our discussion, which is why I challenged him a little bit on his optimism about the pace, or even the possibility, of Islam’s reconciliation with modernity. You can listen to the discussion and draw your own conclusions. But I came away from this with the sense that through Herb, we were being given the opportunity to go back in time and sit in the front row seats at one of the great moments in history (the winning blow which would lead to the dissolution of the USSR) and with one of the great men of history (Ronald Reagan). I also think that he’s right about the emergence of a global middle class: it’s coming, it’s huge, it’s real and it’s spectacular. And investors and entrepreneurs who tap into it will be tapping into the greatest wealth creation event in human history.
However, human nature has not been abolished. The boom won’t happen everywhere; it will happen in the parts of the world which embrace freedom, and it won’t come easily. Supersonic boom? Perhaps, but geographically lumpy and chronologically lumpy and, given recent events, not centered in the United States.
Mr. Bowyer is the author of "The Free Market Capitalists Survival Guide," published by HarperCollins, and a columnist for Forbes.com.