Jeffrey Sachs, "The Future of Globalization"

the time span that I'd like to talk about today is this century basically to the extent possible and not ridiculous whoa I'd like to talk about what I call the deep forces of globalization probably less tendentious Lee called the age of convergence what I basically mean by this is that the modern economic era began 200 years ago with the Industrial Revolution and with industrialization for the first 150 of the last 200 years there was a pretty deep process of divergence between the industrialized and the non-industrialized that is the gap of economic output the military power that went along with it the geopolitical power that went along with the military power all was a widening gap and of course the leaders in that process both in the industrialization and the military force projection and in the geopolitical hegemony was the North Atlantic the United States and Western Europe I believe in the last 50 years that process is now fundamentally changed to a process of convergence rather than divergence and that what's happened is that the mechanisms that triggered this extraordinary run of economic development absolutely unprecedented in human history before 1800 are now a worldwide possession so that China and India and Southeast Asia and Brazil and soon I believe Africa can also experience the rapid economic development and by virtue of the fact of catching up which is the crucial idea that it's economics is a lot about technology and economic develop is a lot about adopting technologies that are already available from technology leaders but have not yet diffused to technology followers thus giving the opportunity for a very quick catching up by virtue of that catching up process the gap between the rich and the poor will narrow and the most dramatic aspect of that is the rise of China because that's 1.3 billion people because the per capita income though hard to measure with precision is rising probably at 8 to 10 percent per year because by the rule of 70 that means that the doubling time is 70 divided by 8 which is a little bit less than 9 years or 70 divided by 10 which means a 7 year doubling time which means we've got an extraordinary process of catching up underway compared to the growth rates of the US economy in per capita terms which are about 2% per year a doubling time of 35 years so I believe that we've changed from a period of divergence to a period of convergence I'll say a little bit more why in just a few minutes the second fundamental driver is the continuing explosion of the number of us human beings on the planet the rate of that explosion has slowed considerably but the absolute increases of the human population on the planet continue to be very significant about 85 million population increase every year adding a full Germany every year to the world's population this is taking place now mainly in the poorest countries of the world that's where the population growth rate so the highest but in a world economy of open borders mass migration and all the rest the consequences are felt everywhere the projections are that what went from a population of roughly 1 billion around 1830 to 2 billion in 1930 and then very fast increments 2 3 4 5 6 billion and now it's about 13 years to add a billion though it's gradually slowing we're on a trajectory to reach about 9 billion people by the year 2050 under current trends there's nothing inevitable about the exactitude of those trends to be sure and one of the things that I'll come back to say is that I think we ought to do is try to achieve a voluntary slowdown faster so that the population only reaches about 8 billion people in the world rather than 9 billion a certain amount is inevitable increase right now just from the momentum of the young population in the poor countries growing up to be parents and that is going to increase by sheer momentum a population of another billion or so barring disaster but we have some choices no matter what actually happens the likelihood is the planet gets a lot more crowded and each of those people being born naturally wants and expects a full life and that means a full material life as well and that means all of the amenities of modern technology and that leads to the third point a fundamental driver and that is that when you combine the now near universality of economic development that alludes roughly about a fifth of the world or a sixth of the world covers now roughly 80% of the world and alludes the part that I talk about in my book the end of poverty that's the focus is on the Neva on the bottom poorest part but for most of the world there's a lot of progress and there are a lot more people when you combine those two facts what we have is a world economy of unprecedented scale that means use of resources land water fossil fuels hunting fishing clearance of land and so forth and a scale never before experienced on the planet likely to become even more intense in its effects on the planet in the next 40 or 50 years today Al Gore received the Nobel Prize for for his work on on climate change and the point about climate change is very simple to put which is that if we just continue what we're doing now same population same fossil fuel-burning we would wreck the planet by the end of the century if not sooner but we're not on a path to do just what we're doing the path that we happen to be on is a path which could raise by a factor of between 3 & 6 the amount of energy we use by mid-century which means that if you think it's bad now the normal growth built into this age of convergence combined with the population increase coming means that the burden of human activity on the physical environment is going to multiply tremendously from an already unsustainable rate so we really have our work cut out for us it's not good enough to just run and stand in place in other words not even good enough just to try to hold the line on carbon emissions that won't do we have to somehow combine economic growth with a reduction and a sharp reduction of human emissions of carbon dioxide and other human effects on the physical earth and all when I come back to this I'll give a name which I really like christened by Paul Crutzen a Nobel laureate in chemistry who was one of the discoverers of the ozone depletion effect and he calls our age the age of the Anthropocene you know the geologists have the Pleistocene and the Holocene the ice age and the post ice age and he said we moved from what a geologist would call the Holocene our current interglacial to what he calls the Anthropocene meaning that the real driver of the physical earth now is people not the declared not not the orbit of the earth which is the main driver of the ice age cycles so he says it's the human age the Anthropocene which now dominates and it's a very potent observation and we're obviously completely unequipped for it right now the news has not reached the White House yet about the Anthropocene and it will have to reach the ears of the next president because this president won't get it before January 20th 2009 and then he can read about it in his spare time and the the last fundamental driver which I think is quite interesting is the idea that while in general I'm a kind of economic optimist because I'm a believer in technology as being the basic driver of economic improvement and I'm a big believer that technology is ideas and I'm a big believer in the spread of ideas so for me it all comes down to the fact that technology's good ideas and good ideas can be shared can be absorbed and therefore whatever good ideas richworld has can be in some way under appropriate circumstances useful to the poorer world and thereby have a broad-based economic progress there are places on the planet that are not part of that process and in category four I use this tendentious name that's used failed States that technically really should be reserved for the government structures of societies where government can't perform its core functions of being the legitimate monopoly of violence for example or the locus of law these are places like Somalia for instance where there is no rid of the state or places in civil war or places that are so impoverished that even if there is a political unity and even intentionality of government there's often no means to carry out the most basic services of commercial law or provision of infrastructure or Disease Control and these places could be called generally failed States now we've always had state failure for all of human history what's different now well one thing is probably they're fewer failed States so that's the good news but on the other hand what's also different now is that disasters that befall a failed state can have worldwide repercussions fairly easily and I always do think if I were asked on September 10 2001 not perhaps not knowing just on basic principles choose a place in the world least likely to bother us here probably I would say on general geographical principles I'll take the center of the Eurasian landmass I mean how could Kabul bother us and of course 9/11 among many other things was a what was a an attack inflicted by a base of operations in Afghanistan and that means that there is really no connection on the world no such thing as the place that is a place that is just too far a way to care about that's true not only in the humanitarian sense it's true in the political sense very real political sense it's also true in the public health sense and in others as well diseases that can absolutely ruin your day like AIDS started in a jungle in West Africa so why the hell should we care about a chimpanzee hunter in the West African rainforest well it turned out because the ZOA notic disease that went from that chimpanzee to the human and then spread around the world has now infected 40 million people and claimed several million deaths a year so there is no sense of an isolated place anymore and that's why I think we do that's in a sense always been a surprise and true and why would a gunshot in Sarajevo start the worst war in our history and or the most the biggest upheaval and it does but here it's even more remote and less likely and less understood places and again I think our politics are very poorly considered for all of this so these are the four drivers that I think are critical the four drivers being convergence demography ecosystem pressures and inter-linkages on the downside meaning that your system better function pretty resilient lien robustly and you better avoid accidents and care about them in the end how does one address these concerns beyond analysis and what I'm going to argue is that all of these are to an extent under human control if you will they're all politically mediated phenomena we have choices on all of them and the choices are going to make a great deal of difference so stepping back trying to see the big picture of the underlying tectonics that are shaping the world and then understanding what are the risks of earthquakes that are coming from this is quite useful because we're not simply spectators in these events we can actually take political decisions there's a problem though that I think is a logical corollary of this way of thinking which is that the political decisions we need to take are more global than ever in other words we really need global decision-making we're not so great at that either you probably noticed but since you're going to be the ones making the global decision-making in the future it's worth you're trying to figure out how to do it I think that most of these issues cannot be solved on a national level the most preposterous thing in the world is the United States trying to act unilaterally this is just an absolutely poor diagnosis of the underlying drivers it's thinking 19th century thinking in the 21st century it wouldn't even have worked in the 20th century but it definitely is the 19th century thinking in couple centuries late so maybe George Bush would have been a good sheriff in Texas in 1840 but he's from my point of view an absolutely miscast president in the 21st century this style of foreign policy is completely different from what you need if you're taking the global shapers as as the main drivers of politics so let me say a few words about each of these and I'm going to try to stop at 5:15 and you're going to have lots of arguments and questions ready and then we'll spend at least a half an hour or 45 minutes discussing those so the first point is I want to divide the world little artificially but I think helpfully into an age of divergence and an age of convergence and I'm putting the breakpoint at 1950 and by this I'm taking an economic perspective where I'm arguing that the gaps of between rich and poor widened significantly in the first two centuries of the Industrial Revolution a few minutes ago I called it a hundred fifty years actually the steam engine was invented around 1719 but it wasn't very functional by 1750 had been improved a bit England was beginning its industrialization in the second half of the 18th century but just England it's really in the beginning of the 19th century that the concepts of the Industrial Revolution take off and mainly at the end of the Napoleonic Wars from then until the end of the Second World War I would claim there was basically divergence in the world economy with one huge exception so the divergence was that the North Atlantic and a couple of other settler sites which are from a demographic point of view minor but from a political and case perspective interesting and that's Australian New Zealand aside from a few places the North Atlantic Oceania and Japan this was an era where the rest of the world was on the receiving end of industrialization and the real industrial icers were the United States and Western Europe in essence and the rest of the world got some industry but mainly it got conquered by those who got industry and I believe that there were essentially these three forces of divergence that were important at the time a concentration of technological capacity that's if I were a historian I'd say Sachs you're all wrong it goes back 300 years before that it doesn't in economic terms but it might in explaining the Industrial Revolution but whatever it is there was a concentration of technological capacity that was pretty much unique in the world in Western Europe and in the United States and then only Japan as a country that developed this capacity as a follower country in the 19th century ii was resource endowments the key to success in the 19th century one key was you had to have coal if you didn't have coal forget it you needed coal because the motive force of the Industrial Revolution was the steam engine and then at the end of the 19th century through science and technology it was learned how to mobilize water power for hydroelectricity and how to use petroleum in internal combustion but before that it was coal and that was a fundamental driver of industrialization if you look at where the coal deposits are they're not in Africa and they're not in most of South America and they're not in much of Asia but they are a bit in Japan some in China I a lot in Russia all through Western Europe and the United States and that made a big difference and then at least in a very simple little bit cartoonish but I think accurate way this burst of technological innovation combined with the energy base which was the fundamental resource need for industrialization energy fossil fuel gave such an advantage of military power that it led to an enormous explosion of conquest there was already colonial rule all through the Indian Ocean and on the margins of Africa but with the Industrial Revolution this became wholesale takeover and that definitely widened the gap still further because was almost impossible to achieve industrialization under colonial domination because the colonial system of every imperial power was designed to hinder or at least not give any basic support to the industrial process but mainly to extract raw materials for the home country and so the political dominate and certainly not to educate anybody or almost anybody but a very very thin indirect rule class in colonial countries and so from my point of view this was a major amplifier of this initial takeoff so an initial takeoff of Europe followed by the Imperial era was a widening still of the gap between those who did industrialize and those who didn't and the receiving end of this was pretty painful it was conquest it was a lot of exploitation a lot of being on the receiving end of a tremendous racist ideology for two centuries and very hard to develop and so I completely reject the idea of Neil Ferguson at Harvard for example that Empire was the these were the pipes of modernization he's written praise of empire how the British Empire modernized the world nonsense in my view it was much better thank you if England had stayed there we could have traded it would have been much better and you didn't need empire for modernization Japan was a very good example of watching learning responding out of fear of course it was the fear of conquest that led to the Meiji Restoration in 1868 and that set off the trigger of modern development but it was Japan sovereignty that enabled industrialization to take hold so what happened well a couple of things happen first fundamentally fundamentally economic development is based on ideas even more than it's based on coal coal is important but it turned out coal was just one of many motive forces oil turned out to be useful eat more easily transportable natural gas other sources of power hydro electricity and so on you can actually trade for energy so you didn't have to own it after a while ideas matter fundamentally literacy spread and Europe went into a paroxysms of self annihilation in two world wars and Great Depression and without that probably that Imperial era would have lasted a lot longer maybe another fifty years it would have come to an end because people don't like to be ruled by other people particularly but the end of the Imperial era was as much a self-destruction of Europe as it was a victory of liberation it was in exhaustion after two world wars and the rise of Bolshevism as a as another path so by 1950 at the end of World War two the politics of conquest was put into reverse because Europe was too exhausted to maintain its empires the diffusion of ideas and technology had gone on far enough that it became possible for this phase of catching-up to start taking hold and japan had invented the model of catching up all asian success in my view was the japan success repeated in several variants japan invented techni technological catching up how do you imitate the leader how do you leapfrog how do you reverse engineer and did it magnificently and then help spread that in a variety of ways to Korea Taiwan partly through the legacy of empire in a peculiar and subtle way and then through direct investments in Malaysia and Thailand and so forth and then all that example became the main example for China in the opening under dong shell ping in 1978 and that was absolutely fundamental because China represents one third of Asia's population and India in a similar way another roughly one third and this process is in my opinion often running very very deeply and and irreversibly except for global disaster so I believe that what we're seeing is the end of the period of widening and now we're in the catching up phase which is natural and the technological leaders are not so far ahead technologically of the technological followers anymore that the engine of new innovation keeps the spread widening and in any event the diffusion of good ideas now is so fast that even if the United States were the lab Laboratory of innovation us innovations would quickly spread to the rest of the world and not lead to this persistent widening that technological innovation in the 19th century did well this is all every word I've said is contestable obviously this is all hunch but if it's true it's pretty significant because it really means a deep reshaping of the world of the meaning of the west of the meaning of the rich in the poor countries of the developed in the developing world and of the relative power of the United States which i think is bound to diminish tremendously not because of a collapse of the US but simply because a rise of other powers and so that's the relative concept and I think that it's a pretty much a likely phenomenon and as far as I'm concerned fine because it basically means the spread of prosperity to more parts of the world so one way to think about this is in terms of GNP shares and this is an attempt using the data by Angus Madison who's our great macro historian who makes GNP accounts over centuries of what this means for Asia the West and that is not a Fria africa and latin america and the idea here is using a simple convergence model to allow for catching-up growth to take place so the pork grow faster than the rich but as they get richer they slow down so they don't overtake the rich they just converge with the rich that's the way this model works if you let it run forever everybody ends up with the same level of income in the quote long-run ok that's how the mathematical assumptions work and the thing that I'm interested in is mainly the Asian you Asia was more than 50% of the world economy from most of modern history because Asia has been home to about two-thirds of the world's population for his for 2,000 years as far as we know and everybody used to be poor before 1800 so the share of the world's population was just the share of the world's GNP in a region was roughly its share of population there weren't big discrepancies of who was rich and who was poor then came the Industrial Revolution and a place with small population could have a big share of income and so what happened was the West became dominant and that's these bars here obviously the the red bars and the share of Asia in the world economy fell from 60% to 20% and the share of Asia and geopolitics fell from 60% to 20% if I could put it that way in naive terms and now this process is reversing as we see every day like the African leaders telling the European leaders at the summit yesterday sorry we're dealing with China now they didn't quite put it that way they said still give us aid but we are also dealing with China now but you could tell the whole flavor of the relationship of Africa and Europe has changed because there's another another party in the negotiations now and so the idea that Europe can just dictate the following terms is passe and that's what Europe is finding because they're interested in having geopolitical influence in Europe in Africa they used to just be able to demand it but now they can't demand it because there's competition from China and increasingly from India as well so the African governments are saying sorry we don't want to negotiate this kind of treaty with you and we'll do this our way and we'll do this this way it's interesting change of politics and if you project Asia becomes again more than 50% of the world's population now on this model by the way Africa and Latin America the yellow bar rises significantly Africa is I don't know maybe 2% of the world's GNP right now and about 13% of the world's population what's very interesting demographically is that Africa will be more than 20% of the world's population soon that in and of itself is a remarkable phenomenon but if there is economic catching up in Africa also Africa all of a sudden becomes a much more significant player geopolitically as well seems strange in a way but it's but it's actually I think quite likely so these are the change of GNP and this is just to say if you run this kind of model mechanically out right now measuring GNP s in so-called purchasing power parity adjusted dollars that's using international prices to value all the different economies at the same set of prices the US is roughly twice the size of the Chinese economy right now a little bit more than twice the size actually so the u.s. is about a 14 trillion dollar economy China's about a 6 trillion dollar economy that's in per capita terms the gaps much wider because China is also four times the population so that means about 1/8 the per capita income level but with China's rapid growth by 2025 China will probably be a larger economy than the United States and by 2050 India will be a larger economy than the United States not in per-person terms but in total one of the reasons by the way is India's pie halation is continuing to increase in a mind-boggling amount in absolute terms by 2050 India is expected to have a population of 1.6 billion it's 1 billion today I don't know if you've been to New Delhi it's awfully crowded and if you've been to the countryside in India it's awfully crowded it doesn't feel like the countryside anywhere and the population is going to add oh another 600 million people so there are a lot of question marks on this but the point is that this is of fundamental geopolitical significance so let me say just a few more words about the demography the oddest thing in development is that the rich have few children they can afford them and they choose to have few and the poor have lots of children and can't afford to raise them and this is a can be rationalized as a individually rational strategy for households under different conditions of returns to children individual investments in children and mortality risk in poor settings with high mortality risk it pays to have lots of children and invest less in each one whereas in circumstances of low mortality risk of children it pays to have a few children invest very heavily in them that's one kind of interpretation of this phenomenon but it leads to the odd point that however you slice it the poorest places in the world are experiencing the largest population increases by far that's a big problem when we come to the failed States because these places have already demonstrated that they're having a very hard time with technological catching up and higher populations in general do not make that easier doesn't make it easier for two reasons one is that a poor family cannot afford to invest in six children with proper education for each of them so the children end up under educated undernourished under tended in health terms and therefore poor when they grow up so you replicate poverty and second the rise of population is putting tremendous ecological stresses on what are very fragile ecosystems so the highest fertility rates in the world are in Africa in tropical Africa that's just missing data but it's actually would be read the same way in the Democratic Republic of Congo basically fertility rates above six that's kind of a mess from an economic development point of view having six children maybe two of them do not survive so a woman will have four children surviving to adulthood and two of those on average will be girls so each mother will be raising two mothers to adulthood and that's the easy way to realize that a fertility rate of around six means that the population doubles every generation so on average you have a doubling of the population every 25 years that's a lot that's really hard to keep ahead of as a development economist I can tell you because you're trying to help figure out what's a pathway for Africa out of poverty and then oh by the way there will be twice as many people in 25 years to that you have to look after to raise for the schools for the clinics for the water for the farms for the jobs and so this is a major major problem but it's a fundamental shaper of the world this is a an attempt I mean it's a heuristic attempt only not a real forecast but a an attempt of the United Nations Population division to give a long-term forecast for three hundred years it's basically running out a model that allows for all places to reach the replacement fertility rate which is too children are a little over two children one of them being a daughter each mother having one daughter raised to adulthood running it out to the Year 2300 and what you're seeing in the top level it's a very I don't know why I don't have color here what you're seeing in the top is Africa's population projection so Africa had not so many people in 1950 what is that these are billions so maybe that's 250 million and by now Africa has 800 million people and by 2050 Africa 1.8 billion people on this forecast so think about how the world is changing tremendously now the part that is relatively diminishing in all of this is Europe where the fertility rates have gone below replacement rate and the populations are now - are expected to decline in absolute terms in the US were at replacement rate and in migration so the u.s. population is expected to rise from 300 million to 400 million up to the year 2050 keeping the US share of the world population pretty much constant Africa share rises Europe share Falls tremendously so Europe's geopolitical role will definitely diminish also but could be quite a nice life you have all those wonderful places fewer people fewer crowds and in fact the if you run the demographic model for Italy which has 60 million people now if you run it to 2,300 Italy has the lowest fertility rate the whole world because they're not listening to the Pope it seems so if you run ATF our so-called total fertility rate of 1.2 which is each mother raising 0.6 of a daughter or each ten mothers having six daughters on average you could see it populations going to tend to go down turns out that by the Year 2300 there are only 600,000 Italians in this forecast and everyone has a giant estate again they all have their own vineyards each one can have a you know a hill town for themselves but that's the that's the implication of the demographics and it does mean a pretty significant change of structure actually China because of its one-child policy also diminishes is share of the world population still is large but instead of being I as it is now 22 percent of the world's population it ends up being something like 16 percent of the world's population Africa as I said rises to about a quarter of the world's population that's only forty five years from now that's a huge change that's not a marginal little change that's a huge change in the kind of world that you're going to be living in and leading and so we really need to take these shapers of of that change quite seriously one of the things that I find impressive in all of this is a comparison of what's happened between Europe and the Islamic world because I have a kind of demographic theory or I think demography has been under emphasized in thinking about this 1,000 year conflict between Christian Europe and the Islamic North Africa the Middle East and and and Asia Minor because one thing that isn't recognized usually the way the story is told is that West that Europe beat the crap out of the Ottoman Empire if you'll excuse the phrase because of superior institutions that's the story we tell and by the late 19th century that certainly it's not institutions it's superior military power but what's quite interesting is how the Ottoman Empire was a really a long time serious rival for with Europe up until at least the end of the 17th the end of the 18th century certainly the end of the 17th century and then the 18th century it lost but a huge difference a huge change was simply demographic which is that Europe experienced the tremendous growth of population starting around 1500 the food supply increased tremendously settlement of northern Europe multiplied and the end the Islamic population pretty much stuck in the drylands of North Africa in the Middle East had very little population increase and so the gap of the European population and the Islamic population widened tremendously and I think that this was probably the fundamental underpinning of the shifting power between the West as it were and the Islamic countries which had a lot of other advantages but finally lost out in sheer numbers now what I find interesting is that with the rise of modern technology ability to import food against oil Healthcare many other things the right the Islamic population has absolutely soared out of sight and it is just now reaching parity with the European population and by 2050 will outnumber Europe and I believe that this is part of the geopolitical change underway in the relative balance of power between Europe and its Islamic neighbourhood and I think this is being severely felt in Europe right now and I think it's a real trend and change that is a reflection of this deeper underlying demographic shift here's the ratio of the population of at least as I have been able to measure it from various atlases of global population the ratio of the Islamic to Christian population started out about one at the beginning of the Islamic Age and then it fell to 20% by 1800 and got taken over by the West the whole region was colonized by the West and it led to a certain amount of unhappiness I would say manifested in a kind of no thank you get out of our region right now which somehow the word didn't get to the White House in time but it was really a very bad adventure to think that Baghdad would welcome us as conquerors and now it's gone back up and it's going to exceed parity and so this is almost never remarked it needs more serious study than I'm giving it but I do think that the demography is really a deep shaper of the changing power right now between the two regions and this is just counting males 15 to 29 you can guess why it might do that because that who's fighting and the interestingly in 1950 when we toppled 53 when we toppled the government in Iran for example there just weren't that many young males in the Middle East compared to the number of young males in Europe but now there are more young males in the Middle East than there are in Europe and the young males in Europe actually don't want to go fight in the Middle East also so that's an amplifying effect and the young males in the Middle East are better at fighting than they were before also and so this is why I think the age of empire is definitively over as well and all these fantasy the US as the sole superpower and striding the world like Rome and the last Empire and all of this I think is just pure mythology and I don't know what they were smoking when they said it or drinking but that's what they were doing they were doing something they were drunk on power and other things probably one other point that I think is worth very much bearing in mind is that in a global society our internal population structures change also to reflect more of the world and this of course is the profound angst of the Republican Party maybe the saving grace of our age they can't tell whether they want to win power or hate other people more and so they're deeply divided on how to handle the immigration issue the party is basically founded on hate or a certain part of it of people that are not like us and on the other hand they need their votes and so they don't quite know which debates to show up to and how to answer and who to kick out of the country and so on and what's interesting is that the u.s. is of course becoming more like the rest of the world ethnically racially demographically and by the year 2050 according to the census 50% of the u.s. will be non-white so that's a huge change that is I should say non-hispanic non-white so Hispanic black Asian other ethnicities will be 50% of the population white non-hispanic 50% and this is of course look at the profound change from nineteen when it was about 77 or 78 percent white non-hispanic it will be 50% white non-hispanic by 2050 and interestingly of course the Hispanic proportion is the largest proportion these are projections that have all of the risks attached to them but it was Karl Rove strategy to his credit that he was the pro-immigrant conceptualize er of the permanent Republican majority because this is one where Bush has been on the open quote liberal side because the idea was to court the Hispanic vote because they could read the same tables these tables they did read apparently from the Census Bureau but they couldn't get their own party to agree to it because the party was founded on quite different principles which was it was a party of just us to put it in quotation marks and so that's a deep division right now that is changing US politics but I think the fundamental point is this demographics is really about the internal structure as well as about the international and the same thing could end up being true in Europe as well where the different fertility rates of the Islamic populations in Europe with a much more hypothetical sense of the in migration from North Africa Turkey and other Islamic countries has led some demographers to suggest that by the year 2050 I the Muslim population could be between a fourth and the fifth of the European population and in major European cities 40 or 50 percent and we're seeing also the tremendous stresses on society and on politics where this is probably the number one hot button issue in European politics now or almost surely is the number one issue in in politics so I think that this is another may your point of of globalization okay I'm done with half my talk so I'm going to accelerate and try to spend five minutes on the last two to two points all of this economic growth is weighing very heavily on the physical environment the growth could be shut down for three kinds of reasons none of them very good I mean none of them very fortunate one obviously is war so everything I've said is forecasting a continuation of peace but we're not so good at avoiding global war I think we better as Tom as the songwriter Tom Lehrer once said if we're going to study World War three we better study it now because we won't have the chance to study it afterwards so one thing that could go wrong is global war a second thing is deep economic collapse globally we've had one Great Depression in two hundred years and it came because of World War only because of World War so I don't think it's in the cards but it's not impossible and the third thing that could go wrong is ecological damage so severe that it undermines the very ability of the world to continue to achieve this kind of economic development that it aspires to and here the basic point is that the number of areas dimensions in which we're really messing with the Earth's physical systems is significant right now it's not just climate it's land it's the nitrogen cycle it's a invasive species it's a diversion of water supplies it's the depletion of ocean fisheries and so we've got very very serious stressors in the world and all of them relate to the global Commons all of them relate to the parts not easily governed by localities or generally by the parts even even that can be governed by nations and that means global cooperation needed to solve them and so far very low levels of it I'm not going to talk about climate change more except I'll say one one more thing about it if you look deeply at the issues of climate change or water scarcity or biodiversity loss here's what I find in a nutshell I find first that the current trends are just terribly dangerous terrible second that diverting from those current trends would not cost a lot so I find the paradox that the current trajectory is worse than you think more dangerous than you think and at the same time solving it is less costly than you fear and that I think is a great paradox which is that those who say don't worry about it are absolutely wrong those who say worry about it because it's going to destroy our society as we know it are also wrong the truth I believe is actually both inconvenient and convenient if we look at it inconvenient in that it's really bad what's happening but convenient in the sense that we are not without ways to address it and the reason is that we're in a were in the predicament we are because of our Sapir your technology and because of our superior technology we also have powerful tools to address the problems so we've gotten into it because of our carelessness and because market institutions can't solve these problems on their own because the signals are all wrong yet the very technology that has led us down this dangerous path suggests closed kinds of technologies that are much much better so I don't think there's anything hopeless in it but it comes back to where I said I was going to end and that is politics it comes back to politics because it's not impossible to find a solution to those problems it's just that we have to agree to do it it's not something like a a good film where you make it because you think you're going to be able to succeed in the market takes over it's something we actually have to agree on to try to do and agreement is politics and we haven't agreed on these things yet final thing I want to say is about war and peace and actually I've said a lot about war and peace there are two kinds of problems of war and peace that I think are quite distinct one kind is war between the great powers because they drive each other crazy competing for preeminence and that's the world war one kind of war where Germany triggered a war because was sure that Russia and Britain would never allow for German technological dominance and so they launched a preemptive strike before they would be encircled so that's the kind of war that one could imagine one true cross-border war and that's the one we started Iraq so this is a map I kept data kept by sipper II the top line is civil conflicts and the bottom line is interstate conflicts and this is the point that I'm making most of the war we face is the top kind of course we we just need one of these to end the world if it's between the major powers but these have been kept quite low and it's the state's falling apart or under great stress that are the biggest problem now one thing that I believe to be the case is that these different categories of problems of environmental stress demographics poverty and conflict are all interconnected in crucial ways and that most of these civil conflicts have a big footprint of all three of those factors poverty demography and ecology playing a role so I view the Darfur crisis for example which has been called arguably the and arguably correctly the world's worst humanitarian crisis I view that as an ecological crisis because it takes place in an extremely dry part of the world that got a lot drier in the last 50 years because of climate change a demographic crisis because the population in Darfur went from 2 million to 6 million people in the last 50 years and a poverty crisis because nobody can figure out how to make a livelihood a sustainable livelihood in Darfur because it is a remote interior parched arid environmentally degraded home of semi nomadic pastoralists and impoverished subsistence farmers and nobody earns any income so I view that conflict is basically a rupture of society that happens when the situation is so extreme this is not how it's usually viewed it's usually viewed as a war some people view it as a war of Arabs against Africans some people view it as a war of Khartoum against Darfur which is the western part of Sudan but I think all of those miss the underlying point which is that this is just an impoverished region facing more and more stress so here's a map of showing in shaded areas the so-called dryland regions places where there's not enough water year-round to keep soil moisture and it ranges from sheer deserts to what's called the dry subhuman and the sites of the world's conflict violent conflicts it's not a perfect fit by any means about half of the conflicts now are in the drylands the other half in places with plenty of water it's not meant to be a mana causal explanation but it's a disproportionate risk factor and I believe that if we're going to get to the root causes of the conflicts we have to get to the root causes of the environment that this junjin weed is is riding over politics has given him an ak47 state politics with the Libya Chad Khartoum and so forth but the desperation is the physical environment where maybe his ethnic group came from the north of Sudan 20 years ago because of the prolonged droughts to try to find a new point of settlement in the south and there is no open land that way certainly not open land with water and so there's been a war of ethnicities since then which Khartoum ended up siding with the with these with the pastoralists so finally choice this is where politics comes in and very complicated I've given you some if they're not even scenarios but I've talked about fundamental drivers the fundamental driver of convergence the fundamental driver of population momentum the fundamental driver of environmental stress and the fundamental driver of failed states in the physically most challenged places in the world the drylands or tropical rainforests with the miserable soils or landlocked mountainous countries afghanistan pakistan i the andean region very tough places for economic development what are the scenarios possible to build from this i believe that there is a scenario of not only peaceful coexistence if i could put it that way but actually spreading prosperity the end of extreme poverty the stabilization of the world's population at eight billion and the solution to climate change that i think is not a utopian proposition that's just a set of pragmatic choices none of them cost very much that i'm an economist so i look at the price tag if that required 30 percent of our GNP i want to know what to do but my but by my count to get those things right would cost about two and a half percent of GNP a preposterous lee small number because we could help the poor escape the poverty trap contraception and family planning is really low cost compared to raising six children in the desert or compared to the war the results and climate change i believe can be faced and greenhouse gases stabilized for under one percent of world income so none of it seems very frightening in terms of the allocation of resources the problem I believe the interesting problem is once you've done the technical analysis it all comes down to politics how can we make decisions collectively it doesn't mean mean only state politics by politics I mean collective choice not only the operation of state power and I think that this is really the big interesting question because also collective choice doesn't operate only through state institutions never did but much less now than it used to so if you think about how to actually address these problems it does involve business it involves civil society it involves government it involves international organizations and treaties and there's no conductor of the process certainly there's no one locus of responsibility or authority and the United States is not will not be the leader of this process it's too late in the day for that we're only 5% of the world's population we are perhaps 1819 percent of the world's income now that will go down to maybe 12 percent we got too many other things on our mind this is not 1945 and US dominance so we're going to need to find a way for collective decision-making for things like this very complicated process underway in Bali under the UN Framework Convention on Climate Change to be successful that's a hundred ninety signatories negotiating but what's also interesting is today the Nobel Prize of Al Gore was shared with the Intergovernmental Panel on Climate Change which is a body of a thousand scientists from all over the world who are able to get their act together to write a wonderful report which clarified the scientific consensus on this highly complex topic so that's a unique in my view unique kind of global process that IPCC of mobilizing rigorous science for the sake of public policy on a global scale so it's a new kind of institution and I think we need new kinds of global institutions that also move beyond normal politics if we're going to pull off the kind of global cooperation that needs to be achieved finally I'm an optimist I don't know how but we're going to have to do this and I like to end these days with the quotation from a great optimist who inspires me to read and listen to when that's President John Kennedy who gave what I regard as the greatest speech of a modern American president in the American University commencement June 10th 1963 and what's interesting about this speech is that it was in the shadow of an even more frightening time the Cuban Missile Crisis and the world had nearly blown itself to smithereens and Kennedy felt this issue of choice more than ever because also he saw that most of his visors would have gotten the whole world killed if he had listened to the generals advice because everybody wanted to bomb and so this is a speech directed to the American people to basically urge them to give peace a chance and to have some hope in the ability to solve problems and it's such a clever speech because it's about the problems of peace with the Soviet Union but he almost doesn't say a word about what the Soviet Union should do only about what the United States should do to make peace so like George Bush giving a speech about Iran saying let's figure out how we should change our views constructively so we can make peace with Iran well I'm not holding my breath although I really like to see it but that's the speech Kennedy made and so I just want to read you two things that I think are very important to think about in terms of the global problem-solving he said first examine our attitude towards peace itself too many of us think it is impossible too many think it is unreal but that is a dangerous defeatist belief it leads to the conclusion that war is inevitable that mankind is doomed that we are gripped by forces we cannot control we need not accept that view our problems are man-made therefore they can be solved by man and man can be as big as he wants no problem of human destiny is beyond human beings man's reason and spirit have often solved the seemingly unsolvable and we believe they can do it again I am NOT referring to the absolute infinite concept of universal peace and goodwill of which some fantasies and fanatics dream I do not deny the value of hopes and dreams but we merely invite discouragement and incredulity by making that our only an immediate goal let us focus instead on a more practical more attainable peace based not on a sudden revolution in human nature but on a gradual evolution in human institutions on a series of concrete actions and effective agreements which are in the interest of all concerned there is no single simple key to this peace no grand or magic formula to be adopted by one or two powers genuine peace must be the product of many nations the sum of many acts it must be dynamic not static changing to meet the challenge of each new generation for peace is a process a way of solving problems many wrote what I think are the finest lines of speech and of the modern presidency so let us not be blind to our differences but let us also direct attention to our common interests and the means by which those differences can be resolved and if we cannot end now our differences at least we can help make the world safe for diversity for in the final analysis our most basic common link is that we all inhabit this small planet we all breathe the same air we all cherish our children's futures and we are all mortal thank you very much yeah I know but what have we done lately yep yep so the the idea of the millennium villages is to go to a region utterly impoverished and believe me think about the poorest place you know and then divide by ten think about a place that has one physical brick structure in a square mile it's almost unimaginable adobe walls thatch grooves no clinic no safe water no road no transport I'm thinking of mbola one of our villages salary is not absolutely as extreme but is extraordinarily impoverished and then ask what's the difference of this and viability so the idea is basically that these are impoverished subsistence or what we call sub subsistence communities that can't even generate sufficient productivity to stay alive reliably much less to have development and situations been getting worse in these places the basic economic theory is the theory of the poverty trap which is that if you're so poor that you can't generate your basic needs you also can't save if you can't save you can't get out of your trap and in fact you can't even hold your current ground because you're depleting your environmental resources maybe cutting the trees or depleting the soils and typically as is true in all our village sites the number of children is rising very fast also there's no contraception there's no family planning and because the poor choose a lot of children also when they see such high levels of death of the children so all of this is truly unsustainable the theory of the poverty trap is that you can convert from an unsustainable downward spiral to a sustainable upward spiral if you can raise the productivity above the subsistence level because if you can do that then there's a margin for saving then all the good things that can happen oh then they invested in microfinance then they added to cows then they built a road then they added a roof then they brought electricity and all those normal parts of positive development can take hold so there's a dividing point in this logic which is on one side of the divide you go down and on the other side you go up and mathematically there's a dividing point where and that's the nature of a poverty trap if this is right that there's a threshold if you can invest beyond the threshold then it's not a matter of continuing the investment then the normal processes can take hold so the investments we're trying to make our improving the soil nutrition building long-lasting clinics schools bringing in electricity which is a one-time investment but then stays there afterwards paving a road to connect the village bringing in microfinance units and learning that's a kind of human capital investment so that we leave at the end of five years but those things stay the we don't we're not going to take the clinic back with us and we're not taking the school back with us and we're not taking the powerlines back with us we're not taking the road back with us we're not taking the nitrogen in the soil back with us we're not taking the nursery in which they've diversified the crops back with us all of that stays we go that's the theory what is the there are several so the general point that is made nine times out of ten oh that's just giving them money but once they leave you know it all falls apart that's happened a thousand times before is a misunderstanding it's just bad economics and I wish those people would call me to discuss it before they write these articles because they waste your time frankly so at least he could have discussed the concept but he didn't even know the concept because they think it's more interesting to attack them to place a phone call which is a little odd okay that's academia it is so what are the real issues here the real issues our first is it really true that you can invest above the threshold so is it really true that there are viable things for this community to do issue number one you know maybe it's just such a godforsaken place it's impossible okay that's issue number one issue number two can you do it in five years that's a good issue issue number three do you know what you're doing so even if there is something and you could do it in five years have you made the right diagnosis together with the community issue number four is managerial sustainability because no matter even if you put the road in and the power grid and the farming you need actually to sustain those investments not the financial or the resource cost but you know being able to fix it if it breaks down for example so and then is political sustainability there has to be a political structure that the village doesn't go to war with itself that it's able to govern the interventions and finally this has to be environmentally smart if it's five years of further depleting the environment but it's based on tapping groundwater that's just going to disappear and we go away and then the drug the well dries up that's also bad so they're about six definitions of sustainability that are valid it's not easy to do this but it's not like we don't think about it morning noon and night it's not a new concept it's actually the core of the concept or it's not the courts the second part the core is raising productivity and it's the insight that you know a bed net and a bag of fertilizer and actually wireless internet and a cheap computer that these things are now available as powerful technologies and then you can have powerful technologies that people don't use because they're too poor to adopt them you need that mindset you need to be able to understand that people can be watching their children die know that they need a bed net and yet can't afford it that's the truth I don't care how many critics say otherwise I know that's true because I see it with my own eyes and I'm trying to convey that and then studies come out and they say oh that's true they couldn't afford to buy it but there's actually even a faster way you look and you can learn some of these things but I admit it's not as scientific but it is actually that's not even true it is scientific to look carefully and to record and to describe it's just not counted the same way and it's got to be measurable and replicable so the core concept is you can raise productivity and then the second is now finally on the under governance we deal every day with the district officials not we'd the villagers there there we don't have anyone there we're just advising the villagers they're the ones living there and local people that are directing the project ok so they deal all the time with the villagers we can't take a step in the clinic for example without it being approved by the district health officer because this clinic is not an NGO clinic it's a Ministry of Health Clinic in every single millenium village that's a point of principle we can't do the road the power anything just because we have the money everything is with the local government so the article got it completely wrong in terms of the substance of that it that this was a mystery it got it right in asking some questions which are the questions that need to be grappled with and frankly five years is a very quick period for this transformation if the donors were you know easygoing and here's another billion item a to ten years but we are in such a difficult world of mobilizing resources that we went to the limit of the resources we can mobilize and we think that it's a close call but an achievable call to do this in five years but it's not automatic it's just that the naive way of that this is attacked oh that's fine but that's just not sustainable misunderstands that this question of sustainability is at the absolute center of the logic the motivation the strategy the tactics whether we make it we'll see please to economies and they have to subsidize their farmers at the end I mean end of courtly sounds sounds great politics yeah so the question was the general principle of opening up to trade is fine but in practice a Europe for example continues to subsidize its farmers keep its markets closed and in the end politics will undermine the end of poverty so good idea but it ain't going to happen because of the politics if I could put the gist of the question this is a very complicated subject so let me say just a couple of things about it specifically about agriculture first truly surprisingly most of Africa's problems most of the poor world's problems are not about trade barriers that they face just is not true and if it were true I'd be the first to want to say it I'd have no hesitation in saying it but it just isn't true if I thought the way to get Africa's needs met was through liberalisation of European markets I'd spend my time on that I actually decided not to spend very much time on that not because I thought it even because I thought politically it was hard I just didn't think it was that strategic a way to to proceed why do I say that because we actually have a pretty open world economy right now for most things the fact that very poor countries in most African countries export only a small number of items oil gas gold copper coffee cocoa tea sisal you know maybe eight or nine come on or maybe eight or nine commodities diamonds the reason that you have a small number is that Africa is not competitive in the rest of the million items the can be traded they just can't trade it they can't produce and trade it and that's true of almost all manufacturers and one way that I think is important to see that is that during this last 25 years China went from 20 billion dollars a year of exports in 1980 to 800 billion dollars of exports this past year in the same world market environment that Africa did no increase of manufactured exports to speak of and Africa did not face any more barriers than China it's just the China was competitive Africa was not why in my view the main reason is that China had roads electricity and a number of other features whereas Africa did not and there's a lot of history which I try to describe in the end of poverty about why the environment is different why the history has been different and what to do about it but in the end of the day I feel that the problems of competitiveness are not trade barriers so much as the capital stock whether it's of salary village or the capital stock of Kenya if you've been on the main road of Kenya from Mombasa to Nairobi to kusuma it's a one road for millions and millions of people it's the highway to the port but it's a two-lane pockmarked impassable road much of the year you just can't believe a country would depend on it they're so poor they can't get that thing built and sustained and if I were you know what if I were I am advising the World Bank mainly as a pest I tell them all the time first thing they'll help them build a proper highway because until you do that you can't get viable manufacturing going because the transport costs are so high you actually can't sell the goods and I went in Uganda with President Museveni a couple of years ago to the four or textile exporters China has tens of thousands Dhaka Bangladesh has thousands of textile exporters Uganda has four apparel exporters in Kampala and I went to each CEO said what's your problem the road because that's a landlocked country on the same road to Mombasa but they can't transport so they can barely stay alive we went to a textile mill with the Development Minister of Tanzania a few months ago what did the Trent the Planning Minister asked the CEO what's your big problem the Road Minister so it's basic infrastructure now there are a few commodities that are really nasty in the policies cotton being the number one and that's the one always held out there and it's horrible my god we've got 26 styles 26,000 cotton farmers in the u.s. pulling in three billion dollars of subsidies what a racket talk about corruption it's disgusting and it depresses the cotton price of Mali and Tanzania and Kenya and so forth but it is not the real issue of development it's terrible I want to end it but you it's important to reflect why have you heard the cotton story 50 times because there aren't ten good stories there aren't even five good stories so what we really need to do is get Rhodes power and and then finally one last point on the real guts of the Doha round negotiations in agriculture the issues are not about Africa the issues about Argentina Brazil Chile the US Canada Europe South Korea Japan Australia New Zealand why because the issues are about cereals they're about wheat they're about rice they're about soybeans they're about a little bit about maize but they're basically about staple exporters which are the mid to high latitude countries with lots of land not the African tropical savanna so that's the you know okay I won't say more okay people who need to go go and then as long as you're willing we'll take another Oh anyone can go any time but let's do five more minutes and then we'll wrap it up okay please and speak speak up please for everybody yes yeah well I think demographics affects the number of soldiers in the field and that is has been important and I think it's actually important now in this strange way in the shifting balance in the mid between the Middle East and Europe I don't think demographics is I when I basically think what's important for demographics because I don't think we should have population policies geared towards making soldiers for war I think the main issue about demographics now is the the issues of environmental degradation and extreme poverty those I think are the most important demographic issues I what I was saying is that I do think that the relative numbers of population will change and that will change to within some margin politics within countries and even geopolitics Africa will loom larger with 20% of the world's population than with ten but if I were Africa I try to stabilize at 17 or 18 percent thank you very much because the issues of vironment and poverty are really the predominant issues that count in this and small can be beautiful in quality of life none of this is about quality of life terms of quality of life you know stay a stable population and a leaving some margin of land and nature is it definitely conducive to quality of life so I didn't want to imply any sense of desirability of a population boom as a way to solve a geopolitical problem quite the opposite I think it's a very poor way to try to mobilize power the dominant finding is that these population bulges of large population growth and high fertility are destabilizing rather than stabilizing and they work against economic development also yes speak very loud so everyone can hear you so how could more Aid get into the hands of the extremely poor the main way is very practical interventions of things and commodities directed at local needs bed nets medicines fertilizer high-yield seeds clinic construction and keep the experts let experts go as volunteers on their spare time not on our taxpayer budget if you had to allocate much less technical assistance and much more commodity support that's what I would recommend of course I'm not recommending keeping the aid budget where it is right now because we're spending actually I was going to show you a picture that's our foreign policy in the United States you know it's a lousy way to build security and even secretary gates our defense minister our Secretary of Defense said in Kansas City last month and I brought a quote hold on what is clear to me is that there is a need for a dramatic increase in spending on the civilian instruments of national security diplomacy strategic communications foreign assistance civic action and economic construction and development said Secretary Robert Gates good for him now I am well aware that having a sitting Secretary of Defense travel halfway across the country to make a pitch to increase the budget of other agencies might fit into the category of Man Bites Dog or for some back in the Pentagon blasphemy it is certainly not an easy sell politically and don't get me wrong oops I'll be asking for yet more money for defense I didn't read that move how awful we don't need more money for defense we do not need more money for defense believe me we don't you know why because this pictures one you're out of date when sip reproduces the next picture the United States will be spending as much as all the rest of the world combined on the military that's too much so mr. gates we don't need more for defense but you are right we need more for diplomacy and development so we shouldn't settle for the existing level we have and I want people to understand that our total aid to Africa is 5 billion dollars a year our total Christmas bonus on Wall Street last year was 24 billion dollars a year 24 billion of the Wall Street Christmas bonus I'll show you one more thing one more bit of magic two days Pentagon spending is 3.4 billion dollars we're spending 1.1 million dollars a minute in the pentagon 1.1 million a minute okay so for two days Pentagon spending we could have comprehensive malaria control in Africa because it that requires three billion a year now Africa needs 300 million bed nets to fight malaria each bed net costs $5 that's one point five billion dollars needed for comprehensive coverage of every sleeping site in Africa with an anti malaria bed net five years they last five years okay drum roll 21 hours of Pentagon spending would get you five years of comprehensive anti malaria bed net coverage Oh God it's amazing it's amazing we can't get this done it is just the weirdest thing I don't know what they put in the water supply in Washington but truly this makes no sense from a national security point of view a foreign policy point of view a public health point of view so this is really about choices and that's why we shouldn't settle for this meager amount that we give right now for every hundred dollars of US GNP how much do we give to Africa in aid for every hundred dollars the answer would be four cents for the poorest eight hundred million people on the planet this cannot be good for our security thanks very much you

Channel: Columbia University

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Keywords: columbiauniversity, sipa, politics

Id: 8beOXxJeaec

Length: 100min 52sec (6052 seconds)

Published: Tue Mar 24 2009