2000 Final Exercises
May 21, 2000
R. Berkeley III
21, 2000 -- I'm absolutely delighted to be here.
I will tell you that the view from this end is much different from
the view from that end. I was going to talk for about 15 or 20 minutes
until I heard from the Darden School. I think now it'll take about
two hours and 15 minutes. When I was honored to be asked to participate
in your graduation, your commencement, I wondered what I could say
that would be meaningful to you. It seems to me that commencements
are about commencing. The word in the book is finals, but really
what you're doing is you're going on to a new stage in your life,
and when I was sitting there in 1966 where you're sitting, I was
filled with excitement and apprehension, wondering how I was going
to fit into the world. What was going to happen to me next? Little
did I know that the current events of the day, Vietnam War, for
example, which were momentous and important, were accompanied by
something probably more significant in the long term, something
that was going on those very years that I had not a clue of.
going to talk to you today about the three big issues that we see
affecting the NASDAQ stock market and I'm going to try to relate
them to your life. We think that there's an explosion of knowledge
going on. We think that the world and the technology that's been
invented in that explosion of knowledge is interconnecting people
in a way that's momentously important. And, finally, we think that
we're seeing a proliferation based on that interconnectedness of
free markets that is incredibly important to mankind.
was it that was going on 30-some years ago when I was sitting where
you're sitting? A number of things were going on in basic research.
One of them, the most obvious, has been part of this cornucopia
that we're enjoying now, all of this wonderful high standard of
living that we're enjoying in the United States. I just got back
from West Africa and from India. Believe me--we are privileged with
what we enjoy in this country, things as basic as the rule of law.
of the things that was going on 1966 that we're benefiting from
now was the early technology that went into creating the Internet.
I'm mentioning that to you because I want you to look 30 years ahead.
I want to talk to you about what you've accomplished, but I want
to lay some obligations on you. We are enjoying an extraordinary
period in human history in this country now. We need the kind of
basic research that was going on that created the Internet in the
1960s and some of the basic discoveries of molecular biology that
have led to our genetics revolution that we're beginning to benefit
from now. I want to ask you to insist by participating in your democratic
government, talk to your congressmen, talk to your senators, let's
fund basic research. I'm completely selfish in this mold. I'm completely
selfish because basic research with a 20- or 30-year lag produces
a lot of NASDAQ companies. The heart of the NASDAQ has been inventions
that have come about and applied in commerce to raise our standard
of living. As we look at this explosion of knowledge that started
with a lot of basic research primarily during World War II and after
World War II, we've got to replenish that early work so that it
can continue to move our standard of living ahead.
like you to think about two or three things. What universities do
for the country is incredibly important. I've been working with
the Council on Competitiveness looking at where clusters of innovation
have occurred in the United States, where the sustainable economic
growth that leads to our higher standard of living comes from. There
is no a cluster of innovation in the United States that does not
have at least one major research institution at its core.
how do we develop knowledge? We develop it through basic research.
Well, how do we pass knowledge on? We must do it through basic education.
We have a crisis in this country in that we're not educating a huge
percentage of our population. I would say to you that what we're
doing in basic education sets the groundwork for whether the higher
levels of knowledge can indeed defuse through the population and
whether we'll have the work force that we need in the future. I
don't want this to be a remote set of words for people taking a
degree from a university today. One thing you'll find, as I have,
is that as soon as you're out of the University time picks up pace.
I can remember as if it were yesterday when I was here and I don't
know where all those years went, so don't think that the future
is some time far off long way away. The future's actually now and
what you do and what you commit to becomes incredibly important
as to what the country becomes because you're among the privileged
talk a little bit more about basic education. You have a wonderful
development here in Charlottesville in this University with the
Core Knowledge Program. It is looking at what we need as a country
to all know about and I think has a wonderful opportunity of bringing
the country together in a way that we do not have in a large fractious
country otherwise, and I applaud Dr. Hirsch for his work in that
are other things that are happening. The NASDAQ stock market is
benefiting from this explosion of knowledge by the creation of new
companies. The interconnectedness of the world is going to put you
in a global labor market. The explosion of knowledge is going to
require you to reinvent yourself every three or four or five years.
You are just beginning your education. The way that these wonderful
inventions and knowledge and this wonderful interconnectedness comes
to have a role in individual people's lives is through the explosion
and free markets that we're experiencing today. I get calls from
venture capitalists practically every week saying gee, I just put
a lot of money in e-something--e-plastics, e-steel, e-furniture,
e-whatever it is.
a new NASDAQ-like market springing up for essentially every segment
of our economy. They ask what can they learn from the experience
that America's financial markets have already developed in bringing
strangers together through various communications capabilities in
order to do mutually advantageous transactions together. That's
what markets are all about--mutually advantageous transactions.
Well, I tell them that they should have come and talked to me before
they put their money up. There's a lot to know. We have about a
100 years of experience, 92 if you start with the credit crises
of 1908, and the ultimate development of the Federal Reserve Board
in the 1912-1914 period and the politics of the '30s and the crash
of '29 and the development of the Securities Exchange Act, '33 Act,
'34 Act, the Maloney Amendment in '79.
of these things sound sort of abstract but they're all about how
human beings deal with each other. We have a long tug of war between
privileged market insiders who want to keep what they have close
to their chest and the public operating since the '30s through the
Securities and Exchange Commission saying the public deserves to
see more. We have a whole book of rules in the NASDAQ. We have a
governance oversighted NASDA regulation that insures that we adhere
to our own rules. We have the Securities and Exchange Commission
looking over NASDA regulation and we have the Congress--
the way, we have a great public servant, Mr. Bliley. I don't know
where you are, but one of your Board of Visitors is responsible
as much anybody in this country for the soundness of the markets
that we have today through his service in the Congress overseeing
the SEC and overseeing America's markets. This is all about how
we deal with each other. We don't have a rule in our markets that
didn't come about because the public said in our democratic process
this behavior that we see some people exhibiting is not acceptable.
We have raised the bar over time and we have a whole set of rules
of engagement, how we're going to deal with each other. Well, I
say to my friends in the venture capital business that they need
to understand those rules of engagement because the financial markets
are so much farther ahead, have had so many more transactions than
the other new market wanna-bes.
all of the issues of human behavior are going to be the same. You're
going to have to deliver a product that is what you say it is. You're
going to have to tell people when you solicit their order the truth.
You're going to have to let them know in what order of precedence
they're going to be dealt when they come to market, and that they're
going to be dealt with fairly. This is why America's financial markets
are the envy of the world. This is why we have a large part of our
economy funded with low cost capital. There's no other country in
the world like ours that will let an entrepreneur come forward with
an idea and has markets and a regulatory scheme that will allow
those entrepreneurs to take public money and put those ideas to
the test. There's nothing that we do in the markets that says those
ideas must succeed, but we give them a chance where in many other
countries they would not be able to succeed.
if you tie all this together, I think that you have a certain number
of obligations. I don't want for a minute to say that you don't
have huge opportunities because you do. There's no opportunity like
the opportunity you have, but I don't want you to take those opportunities
on without a concomitant sense of obligation. These wonderful standards
of living that we have today did not occur by accident. They occurred
because people like you who are educated and who have a leadership
position in our society engage in the process of government. I challenge
you to get involved, to learn and participate. If you do, you will
make this University proud.