Connections Podcast Episode 11: A Planet in the Balance with Jeffrey D. Sachs
The global economy equipped to meet the existential threat of climate change. our poverty and inequality, the product, or cause of poor governance. Welcome to connections. The
Arab Studies Institute interview program on current events, policy questions, and new ideas. I'm Mayra Berni and for this episode, we're delighted to be speaking with leading economist Jeffrey Sachs who joins us from New York. Jeffrey Sachs is a university professor and director of the Center for Sustainable Development at Columbia University where he directed the Institute from 2002 until 2016. He is also president of the United Nations Sustainable Development Solutions Network and has been advised to three UN Secretaries General. he has authored numerous best sellers. His most recent book is the ages of globalization.
geography, technology, and institutions, Sachs was twice named as one of Time Magazine's hundred most influential world leaders and was ranked by the Tommy Among the top three most influential living economists. Professor Sachs. It's a real pleasure to have you on the program. Great to be with you. Thank you so I'd like to begin on the topic of climate change which is very much in the news today given the recent I PCC report, the science is all clear and unfortunately unfolding all around us. The
economics of preventing climate catastrophe seemed to be much more contentious. What are the measures the transformation that need to be implemented. What is the time frame available for achieving these and do you think it's realistic to expect these changes to actually occur? Today's report by the IP CC is indeed Grim. Uh
it is the uh working group one physical science report and it says that we are warmer now than at any time in the past 2000 years and if you look at averages over long stretches anytime in the last 100 thousand years, it's a shocking the situation on the planet and we see that everywhere. Now, Mega forest fires uh massive number of storms uh in in the Atlantic floods all over the world. Uh heat waves that are unimaginable. Northern Canada
uh hitting 50° Sea uh Siberia hitting a record temperatures uh the warmest or the second warmest temperatures and most of the continents in the world. It's it's shocking what is happening Now, what to do? Well, the the excuse me, the background of this is that we became a modern world economy through fossil fuels uh and uh the Middle East knows that well, it's the world center of hydrocarbons uh with the invention of the steam engine uh two centuries ago plus uh uh uh another 25 or so years uh and then the inventions of the internal combustion engine and the gas turbine Uh we built uh a world economy based on coal oil and gas and it was discovered about 125 years ago Uh that sure enough by burning all that coal oil and gas uh humanity was raising the concentration of carbon dioxide in the atmosphere and that behaved like a blanket or a trap of heat that would warm the planet that was actually first understood around ninety-six. Since then, we arguing about it. Uh the fossil fuel producing countries like the income that they get from that. I live in a Petro country, the United States. Uh
it has a huge oil, gas and coal sector We had a president, a not in my view but a president who uh President Trump who even until leaving office on January 20th this year was actively promoting more fossil fuels. He he was a psychopath in my view but uh I'll put that aside just to say that We did not get on a common global determination that we have to end the dependence on fossil fuels. Now, for a while, it seemed how the heck could we do that? We depend on fossil fuels for a modern world economy but the fact of the matter is over the last 25 years and with huge advances in the last decade, we've been able to or I shouldn't say we were the we are the lucky uh uh errors of that but the scientists and technologist have been able to come up alternatives. Uh most importantly, sunshine through photo Ulta wind turbines, uh electric vehicles that run on the electricity from wind and solar rather than on the oil uh from uh petroleum, the gasoline from petroleum and so forth. So, we now have a path to deon the world economy Uh this doesn't sit well with major oil producers whether it's companies like ExxonMobil and Chevron or countries in the Middle East or many of the US states or Russia or Indonesia or Australia that have a large, large revenue from fossil fuels but the fact of the matter is we need to do this urgently. If
we're going to have any kind of safety on the planet and that's true in these countries themselves. Think of the Middle East getting hotter and dryer. Think of incredible storms, floods, droughts in the United States. Uh think of Siberia
hitting more than 100° Fahrenheit temperature uh and all of the chaos that are is being created by that. Think of the feedback mechanisms that as the world gets hotter, the planet burns more that releases even more COtwo into the atmosphere and we're seeing those adverse feedback loops all over the place and ocean currents and release of methane from the permafrost in forest fires in release of carbon from rainforest such as the Amazon All in all, this is shocking. All in all, we need to Deb All in all, we're going to meet as a world at Top Twenty-six. That means conference of the parties 26th edition in Glasgow at the beginning of November and every government, every region better on one message which is yes, we will decarlo later than mid century. We will help each other to do it. We will share technologies. We will get on
the case and we will be fair about it. Sharing burdens so that everybody can benefit from this and not have parts of populations or regions or countries left woefully behind by this transformation and is that something you expect to emerge from the Cop Twenty-six conference? Oh, you never know With the politics uh but it's looks better than a year ago. Uh again, the US escaped by uh the slender of margins from uh a dangerous authoritarian psychopath who's still lurks in the shadows in the United States. So, they were even not
in the shadows but we have a president that's committed to climate safety and to decency. He called forty world leaders by Zoom which I hardly recommend for world leaders Talk to each other, get on Zoom. Uh you don't have to fly around in a huge uh entourage.
its just get on your Zoom and and get to know each other but the President Biden brought together forty world leaders in April and there was a really a move towards consensus. Now with this new PCC report. Uh God help us If uh if if the politicians can't figure this out and we we need to help them figure it out. Um turning now to a related subject during the past 18 months. uh the COVID-19 pandemic has laid Barron's start to detail the human costs of inequality in the United States and other countries.
Essential workers were revealed to be the most expendable and became ill and died and disproportionately high numbers. Currently, we're dealing gross vaccine disparity. Where for example, 60% of adults in the European Union have been fully vaccinated whereas for Africa, the figure is only 1.6% appeals
to self interest in terms of protecting wealthy nations from new variants, emerging elsewhere have clearly failed. What are the main structural changes required to address these types of inequality and the growing human costs and how can this be achieved? I think one thing we've learned in every region should take heart is uh promote science and technology locally. Do not depend on others. uh because what we have right now is a few places that produce vaccines and the rest of the world begging for them and that uh inequality is profound and it's part of the story of why new variants are arising after all Delta which is setting All of us reeling. Uh probably emerged
in India. Uh we don't even know for sure but it's spread to the whole world and it really proves the adage which is sometimes taken as a cliche that you alluded to it but it's actually true which is nobody's safe until everybody is safe and right now unless we get comprehensive global control over COVID, we're all vulnerable to the continuing emergence of variants that will evade the vaccines that we have now, most of the world does not produce vaccines and so most of the world is waiting and maybe they're going to get some but what has been dismayed to me is that the rich countries have by and large treated this issue once the vaccine existed as a so called market based issue buy it. Who can make the contracts? Leaving the companies in charge Whereas this is no time for a pseudo market. I call it a pseudo market because it's not really a market. There are only a few producers. They gain their
intellectual knowledge, their IP by government financing, especially from the National Institutes of Health. Uh there's no way that Pfizer Biotech or Madea would have come M RNA vaccine but for US, government financing and then these companies were given 20 year monopoly privileges by their patents which actually are co owned by the US government. So, uh the US government should march in there and tell these companies what to do but US politics is as I think everyone understands is really twisted and corrupt uh and so changes his hands so much. The corporations run the show to a large extent and the result is that these companies who are where they are by virtue of public finance and in the midst of a global emergency are out trying to maximize their shareholder value rather than stopping this pandemic.
So, we have a category confusion that is massive. What we really need is for the US Europe That is the EU. Uh UK Russia, China. and India to put
top technocrats around the table together with WHO with the UN to plot a month by month campaign for global immunization coverage. that is fair financed, and affordable. It wouldn't be hard if we understood that this challenge was a uh organizational and an inclusive challenge, not a market based process but again, in the United States, the companies run the show and the politicians can't really even imagine it another way and and is that applicable more generally to economic inequality. If we take a broader view of it than just um the the current pandemic? Well, I think there are couple things going on in inequality that should be understood. One is that as We've understood for a long time when technology changes, that creates winners and losers Uh in the period from roughly 1950 onward, the major change of technology was to favor advanced human skills over uh raw labor and that led to a massive change of distribution. people with
advanced education had rising incomes and people with basic education had stagnant or falling incomes. So, society divided between the educational haves and the educational have nots. Now, we're in another fundamental technological transformation that is uh around digital technology because we become a digital society gradually until 2020 and then we're thrown into it Since then, who are the winners now? The ones who own the digital platforms. So, mister
Bezos has 200 billion dollars of personal wealth. That's a lot of money by the way. Uh and all of the top wealth holders are tech uh people uh from Google or Microsoft or others and so the result is they've become phenomenally richer during the since the pandemic started. If you can imagine the billionaires have had the biggest gain of wealth in history during this pandemic crisis whereas hundreds of millions of people have seen the the the floor fall out from under them. That's another change but then the way that taxes generally work in the world is the rich don't pay them the super rich pay them even less if they get capital gains. Uh that means they own companies whose market value goes up generally in the US system. You don't pay a penny
on that kind of income until you sell the shares but you have no reason to sell the shares because you don't want to pay taxes and and so the the gazillion Andres have had soaring wealth to more than 100 billion dollars paying almost no taxes and then so much of society struggles to put food on the table and the food and agriculture organization and its partners Unicef and the food and Agricultural Organization World Food Program issued a report also uh this this week on food insecurity showing that hunger is rising in the United States by the way in the richest countries at the same time that the gazillion ere wealth is soaring So, we have structural issues that are deep. Now, what do you do about it? What we learned from the industrialization process and what we should have learned from the skill intensification process and what we should understand in the digital process is that the only way to respond to these inequalities is not to sit back and say, well, that's the market that's not an alligator. of human value of dignity, of decency, of fairness, or of stability. what we need to do is have the government taxing the super rich taxing large profits and using that to make sure that every single person has access to health care education, and other basic needs. Sometimes that ethos is called social democracy. I regarded as the most successful political orientation in modern history but it says, you don't just sit back and let the so called forces or the technological forces determine who lives and who dies, who's rich, and who's poor. You have a government
which make sure that there is a society that operates as a society that everybody is entitled to dignity and to basic economic needs. It's pretty straightforward. Actually. The UN member states agreed to to it in the universal Declaration of human rights but uh remember that they agreed to it necessarily even though that goes back to 1948. So, but if if we now look at this perhaps on a more global scale, um many development economists identify mismanagement and corruption as important causes of poverty but in year 2005 book the end of poverty you wrote and I'm quoting Africa's governance is poor because Africa is poor and quote others would Africa's governance and people are poor because they've been subject to decades of structural adjustment and austerity by international financial institutions. while donor
governments extract considerably more in interest payments and cheap resources than they provide an aid. Can the system be reformed or is is it more fundamental overhaul required? well II sometimes say that there is a widespread corruption not only in Washington but also else You know the narrative coming from rich countries is to point to poor people and say, you're so corrupt but look at the US, political system, It's a money machine. Uh where a an election like the 2020 federal election in the United States had something like 14 billion dollars changing hands, rich people and companies giving money to their favorite candidates who they count on to vote tax cuts for them. special privileges or deregulation.
That's a corrupt political system as far as I'm concerned, a lot of money slashing around to affect outcomes and billions of dollars of lobbying. What's all that about? Why spend billions unless you're able to buy your votes and your legislation and write your legislation. We had a uh a scam operation uh recently where uh a uh an ExxonMobil lobbyist was scammed into thinking that he was speaking with the headhunter looking for a job for him and so he just spilled the beans. Oh, we go to this senator. This one's the king maker. We do this. We do that. Uh we we lie about our real policy. He explained everything
about what the lobbyists do. That's a corrupt political system. So, a big part of our problem is that the the rich operate with impunity in a lot of places. the United States has not had decent political order for quite a long time and it disintegrated into uh something shocking during uh Trump uh who brought psychopathy to the top as well as this kind of vanity. uh and
we're struggling to get out of uh out of this right now Uh another thing that uh you might have mentioned uh in this analysis is the of the powerful world in the poor world, not just through things like structural adjustment and so forth but actually directly through war. geopolitics, uh meddling interventions, and so on the Middle East, uh your region has been really for 100 years since the Versailles treaty. I won't call it a playground of the Uk, the Us, and other powers because there's no nothing playful about it but I would call a meddling ground. Uh how many wars were fought for oil? Uh how much uh deprivation uh when uh the US and the UK uh uh overthrew mosaic in 1953 uh or uh uh uh in Iran or uh in uh 1980 uh when the US funded Saddam uh to uh launch a war on Iran uh or The two gulf wars that the United States are directly led to put troops on the ground or the CIA operation uh Kimber Sycamore in which destabilized Syria. You know, this is a huge part of the story after all this outside meddling. uh and when it comes
from the United States, all I can say is there's so much ignorance in this country So much lack of knowledge of basic history. geography, I Of course, knowledge of Islam. It's pretty fundamental. The amount of ignorance. So, when
you have an extremely powerful country, a meddling country, a country that operates a secret army, the Cia, and you compound all of that, you get a tremendous amount of destabilization and most regions of the world have experienced that over the decades Central America, obviously in the 1980s Latin America for a lot of history where uh the US overthrow government's right and left Southeast Asia, Africa with its proxy wars in the Middle East with its proxy wars. You know, geopolitics is a big part of this story and It desperately need a world in which the UN Charter actually works in which the UN uh universal Declaration of Human Rights is the guiding moral principle that's based on dignity for every human being and basic economic rights for every human being and some uh peaceful investment in the future because that's the key for real economic development is financed to invest in education and health care in in zero carbon energy and all the rest. So, just to say, you know, it's a we're we're a rich We're technologically sophisticated world but we're not a very fair world, very honest world, a very transparent world and if we actually abided by basic principles that we you know, we we kind of uh claim that we live by these principles if we actually live by them, we'd make huge advances on the planet. So, you've laid out the aspirations and and you've identified the mechanisms that could be used to achieve those aspirations but III, think for many people listening. The
question would remain um how would how would theory so to speak be translated into reality given um the self interest and uh um you know, and vested interests and so on that you've also identified how how would we translate these lofty objectives into realistic prospects? Well, I could, I could tell you one thing that uh Plato uh the the great philosopher asked the same question. uh this past past summer. I uh since I'm working on uh Plato and Aristotle and their relevance for today's world. we uh I visited the
Syracuse uh uh in Sicily uh and uh where you have ancient Greek ruins and the Roman structures uh up to the modern day. It turns out Plato came three times as a political adviser to Syracuse failed all three times when it was sent home packing all three times and so he must have asked the same question. How do we turn good philosophy into practice? It's not a new question. Uh it goes back uh uh to uh roughly 350 DC uh DC but I would say the following, you know, we need reports like today's I TCC report which say this is our knowledge. This is our science. Uh we need to
report like the state of food, security and nutrition in the world that I referred to by Ao. We have a UN Charter. We have the universal Declaration of Human Rights. We have the
sustainable development goals. We have the Paris Climate Agreement Interesting. You know, we're we're not far on a rhetorical level from having a direction. None of our systems
works very well right now because we also had an insurrection in the United States on January 6th. We have a Republican party that is dead scent as it's central mission never to vote. at one penny of increased taxes from rich people That seems to be the only consistent philosophy of that party that I can discover. We have uh of course lots of people who are uh by their own misfortune, not well educated and so these issues are not well understood. We have vanity
in uh the media. Rupert Murdoch is uh Vio character number one in view because he runs a whole global network dedicated to lives. whether it's Fox News or the Wall Street Journal or other of his uh press. Uh he
lies about climate change lies about so many things. So, it's a tough question you're asking and it's it's not a question that uh we've ever found a reliable answer to for 2000 years uh basically which is how do you make governments that are responsible? It happens It happens on occasion. It happens when there's enough shock that my god, we better do this or we are really toast and this time, we are going to be toast literally because the planet is going to burn up unless we get straight on what we're doing. What do we want? Mega Forest fires all over the world because of the human induced climate change. So, my only answer to your question is knowledge, Knowledge. that I
hope turns into wisdom, wisdom, wisdom. Uh that means knowledge plus some ethics uh that uh will give us the way forward and you've you've spoken um quite a bit about inequality uh today. So, I'd I'd like to return to that subject um because it has become an increasingly prominent theme not just globally but also as you pointed within wealthy countries, particularly the United States and so, my question is, whether it's realistic to expect governments that don't address inequality within their own societies to contribute constructively to addressing global inequality and poverty. The answer is no. It is not realistic to expect that uh the countries that are the most generous internationally are the most generous within society. So, the country that give the most in development Sweden, Norway, Denmark, Finland and low and behold, those are the countries that also are the most equal and they're internal income distribution. It's a size of
the same coin in a manner of speaking. It's an ethos, The United States Ethos is I'm going to get whatever I can in any way that I can. Trump of course played that to the limit because his view was you you should lie and cheat and steal because truth telling is for Uh you know, they're killers and and uh they're losers and he wanted to be a killer. So and he ended up with hundreds of thousands of dead from COVID because he couldn't say an honest line So, Ethos is extremely important. The US ethos is the so called libertarian ethos. You're on
your own and we leave the poor in the US to suffer and we leave the poor in the world to suffer. Now, is this fate and permanent mighty answer is no even within United States Society, we have an ideological battle underway and today, this very day, the Democrats in the Congress have put forward a three trillion plan to fight poverty in the United States and to fight climate change and it will probably pass in some form on a straight party vote uh because the Democrats uh it's 5050 and then the tie-breaking votes, the vice president, the Democrats so II think this will pass in the weeks ahead and it shows that within the US Society, we're in a in a battle over the future. Do we want a decent fair future or is it a free for all And I think It's a close call but it's one that we have to we have to fight to make right? Uh and uh the fighting here is to stop fighting the fighting by. when I say fighting, I mean, fighting for values, not fighting each other. Uh We need to embrace the idea that the world is rich enough for everybody. So, share now, one more thing that I would add is we've never had good sharing across national politicians are elected locally. The UN. It's a
wonderful institution. I've spent a lot of my professional life working for and uh trying to help the UN but it doesn't command finances. Uh it's a political normative institution, not a financial institution and uh we need to turn the resource flows in the direction of the values so it can be done. We need do it Most people in the world want to do it. The rich and the powerful many act with impunity but we we need to end the impunity and upgrade the responsibilities Professor Jeffrey Sachs, thank you very much uh for joining us and sharing your insights uh with connections. Absolute pleasure to be with you. Thank
you so much. Thank you.