« Armchair Expert with Dax Shepard

Jeffrey Sachs

2020-06-25
Jeff Sachs an American economist, academic, public policy analyst and former director of The Earth Institute at Columbia University, where he holds the title of University Professor. He is known as one of the world's leading experts on economic development and the fight against poverty. Jeff chats with the Armchair Expert about his career in international economics, what he’s learned from advising other countries and his propensity to model Scandinavia’s middle way economic model. Dax asks about communism in theory vs. in practice and Jeff implores us to take care of one another. The two talk about how the history of WWI has led to today and Jeff describes ways in which we couldn’t have a more balanced economy.
This is an unofficial transcript meant for reference. Accuracy is not guaranteed.
God what's going on, and he told me you know, socialism is great, and capitalism is evil and tat. Is There was nothing there that I wanted, but there were some. There were some books on a bookshelf, dial, during the rest of the summer, hotel wow. This is even more confusing and basically
I want to figure this out yeah. If I live to get interested in something in it, just doesn't led up the area you know. For me. It was really that formative moment, of course, is now right. What are they sing about us? And how do you understand this? So I started on that forty eight years ago. I'm still on that question. Basically, I know a little bit more than I did then under its been quite an adventure, but it still is really my driving question. You know why get our head around that? What should we be doing its equestrian? The just doesn't stop actually
so that the most recent one, the name escapes me, but I read it it. He talks a lot about that. There was basically to narratives. You could adopt. conclusion which of course, I happen agree with his you just
at the Koran who was one of the top solidarity leaders in Poland and smoking in the habit of raises the alongside and always several intense hours really the table, saying that can also be back Rosa me, which means yes, I understand. Yes, I understand them. little smoke filled flat.
non communist New NEWS, the room that had
every moment because it was so intense and it just happened, they had escaped in a dramatic
rightly or wrongly, the as an individual either. I would imagine that would be a very empowering experience where you could think Yemen
to do one foot on each side, basically for them, resting rewarding approach. I find yeah for we go down that road. I guess I'm wondering in the seventies eighty nine these you had these two options: capitalism right and now not a confusion in this country about what socialism is
With that view, all the way since then and the idea of social democracy is its amount paradigm you're you're, basically circling some industries that you ve decided, should it be for profit welfare
from my point of view, is a social Democrat, whatever phrase he uses in the sense that what he likes and promotes is we suffer from on all topics. Now is this kind of buying, yeah the label feels like a short cut to understanding. Might well, that's Venezuela and you see I get it
to give that kind of contacts of like we did inherit any truth. This is an experiment: it's evolving were learning we're gonna change
If you really pay attention
have to be solved diplomatically because the greater safety net than any short essays ever written in modern history called perpetual peace. peace on earth and is
and so the idea of a kind of commercial peace or democratic peace. That's based a bit modern history and there's a very eight was the first date of publication. It could have been one thousand nine hundred and ten a book called the illusion of war and the book a Norman angel had a hypothesis and its law. following ways said: were nineteen ten we have a global in writing for the British, the british Empire rule the world he set were so interconnected. War is completely irrational and he expects
no way to win. An acre was a seller and a war, one, a pivotal break up Global society and fundamental ways: it was the old you see, I told you. I said leave me when I wrote the first book
more his efforts and The truth is. The argument is right: that war unbelievably destructive and the mind in Afghanistan. In: U S lead wars, it's true, but the right to say well because word dub as
yeah. I guess I dont know how, where everyone is that we are stuck in the cycle of reaction from World WAR once a track it really quickly. There is an act of terrorism, they assassinate Archduke Ferdinand. It causes world were won the war operations of world war. One on Germany cause the rise of Hitler. Then we get rolled were too. Then we get Russia, we get the cold war. Then we get Vietnam. Then we get Afghanistan being used as a upon that World WAR one was the war and all war. That's what Woodrow Wilson claimed it's been said that the peace Treaty was the peace
in in a lot of ways, Britain, and in the first decade of the twentieth century, one of Churchill to move the british Navy from coal to and he efficient and powerful, with oil as the fuel rather than coal, power and it Control over the Middle EAST Lebanon and Britain
which is now in Israel to provide Navy, so geopolitics go. You are filling station now, the? U s Saudi Arabia was the best friend it was created actually away by the british Empire, you're in the nineteen twenties, the house sorrowed was promoted, make Saudi Arabia and then Roosevelt towards the end of world war. Two
believe oblique cynical. You know our oil again and we put in place a police state
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credible, drumbeat propaganda, and then they outsource this bit of labour to a developing country and then. this pattern- I guess it went from us to China and then it from China. Now they move some there's have to Vietnam and innovate numbs moving some of their stuff too. I guess the subcontinent right. This is all like, what's happening to you,
in game of that when everyone's risen and no one wants to do that, work who the fuck doing that work is that were a eyes steps and if you just chart this or what we get of import martians to do this labour. No one wants to do. How do we do this year? Description is pretty good. How this process works, but the ants is that there is an arrow progress if it's done peacefully and worst work EL changes drama two hundred years ago, when the steam engine was first starting the industrialization process about nine? Humanity was in subsistence farming, so
step by step, going away almost every place. It is replaced by machines in the end
Do so many basic things, so my workin and I spent a lot of time in anyone that ever tells you how the poor poor cause. They're lazy. Does it know anything? so damned hard. Because it's back breaking and I spent up. they actually about development and was with it
and so there I was, you know, shirt sleeves rolled up and I was doing my weeding also and after the sun is so damn had I known Agatha killing me out The idea really is that a zero sum game. It is a way to a better life, and so you ask the question: how can this be enjoy
in this sense of using development aid or director. Transfers or been source technology so that poor countries get that stepping stone because they need it. I only learned this from reading those Lyndon B, Johnson books, but electrification of the US. The market would not have solved that crisis. They were not going to run power out to these farms. It was never going to happen and they compare in that boy the amount of ours man washing the clothes ironing, the clothes, all the things that electricity, those people, Had literally a third of the time that people of electricity in the market wouldn't have fix that we intervened, you need rural electrification, which was part of the new deal in the nineteen thirties and nineteen fortys, and that was the stepping stone to productivity to rising it,
comes. All of this involves change. That also can be difficult because when you mechanized agriculture, agricultural workers lose their job. They go to the cities you have another issue: how are you going to create decent jobs? So what is the one logical? end of that story that I'm a big believer in is that, as we can better and better are doing things. We actually can also take some more leisure time not only a matter of the grunge. work and when I am told that the Thank you. I know of no moral dilemma about that. Do exactly Sabbath. I dont want job Pisa study on all the computers I want us to. of the action
technology. So there is a distributional issue, its apparent quite interesting. Juno did this topic Jeffrey diesels, who is now a hundred forty billion dollars, will be it ex trillion dollars and thou be. That which is all the machines, can do everything we can go. Have a cup of coffee isn't that wonderful? Your machine will talk to my machine. We can go, relax and enjoy ourselves and still benefit from all of this. But in order for that to be that we own a now you'll be. I universal basic income redistribution, the skills,
partly ideology, and partly just God, damn polluted themselves tax cuts and all the rest, as opposed to those social democracies that I like where people make that choice. Yeah, ok, as You know the pendulum swings in its swings globally and I think we started scene. I guess maybe it was about seven years ago, where there was a huge Bertie consists and swing all around the globe towards nationalism. I guess you could also call kennedys populist movements. What do you think is the force that made that pendulum swing both with breaks and then numerous other global nationalist movements to things that are important. One is kind of pure contagion, meaning if it starts in some places. It propagates you a good example of that you know
ok, there's some nasty guy. We better have a nasty guy. Also up now there two of them or we better, have a nasty guy. We better eminently guy, and so you get a kind of propagation of this, but it is also a little bit more contrived. You look at whose the trump of Latin America is both in our own is really prompt light in Brazil. Trump helped to put him in power not only, indirectly as a kind of model. both scenarios that I will be. You know with the present the United States, but actually mechanically that banning helped with the campaign that, Some of the financing, some of the technical support was like that guy and were Johnson in Britain it was the populace. You know there a Trump Johnson linkage these are Subtle- and I don't mean to make it so mechanic
but there is a kind of contagion that just happens and it can get out of control. It happens in different ways. Also, why does it happen will want answers as everyone else does it? I'm not gonna be the only stupid guide. I pay my taxes, and so you just end up with the pendulum swinging on the self reinforcement, but there is another issue, two more issues. If I could you not, one is cheap by who they are, what they know what their job is to achieve. in the so called big five personality. Categories which second, just use. One of the big five is openness to change some of us I'm one of them. I like change. I call this a new technology. How does it work? Explain it to me and others. People say shit. I the way. It is don't bother me this change,
I really resent this change. What again, in defence of those people, as you pointed out many people, are on the that the short end of the stick. When change happens, therein were there in a town in Ohio or they got left out. I was going to add that as another category which, as you know, really direct differential act, but even before we go there, some people are pretty cool the board change others, not it. but this is just a fact statement states were the personality, literally show more resistance to change. those are more red states, its correlated also people move. They moved the big cities. If they like change it, if they dont, change. They are smaller towns, often so that's a second thing again cause and effect is always Howard, our people, where their living, because
you don't like change good point near or of your new Yorker LOS Angeles, if you dont like change how what the boy you're gonna be driven crazy in one day, but then the third That's what's weird about american politics. In my view, it maybe it's not we're, but its impact the vote in the swing states are working class jobs that were the jobs that were lost to China, and he appeal to them on the grounds. I'm gonna fight, China, I'm gonna fight, Mexico and so forth. As an economist, I can tell you and I've studied at issue for almost half of them approaches to say, look bad chain,
did leave you behind it made lot, people better off and we, should make sure that were in a society where you're benefiting too but not to stop the change, because we stopped the change. We don't get the general had have that in our politics as a got instinct, so Trump played Anti China Card Data their jobs, their evil. Where I would say no China's catch up and yes, we benefit, because we buy a lot of products China, low cost and so forth. But when people are left by, what are we gonna do? Is that job training, free television free help. by stopping the trade, but by solving the problem. It's just not right
To say, the solution to the problem of Akron Ohio is bash. China the solution is, make sure we're all in this together in the EU scores were so damn rich. We could make sure trading, free healthcare and so on. That would be an oh gee, I understand, that's not China's fault that our internal folk, I would be remiss of- I didn't say: Monaco agree, you're, you're kind of Swain me in some drugs that I know every guy, let's go it, but I will say when he was on sixty minutes, I'm like her Doesn't know what the fuck is. He can't even pay for the first thing on his list and he's got five more thing. It healthcare in an in and of itself is maybe unpayable or it could be paid. But it's going to be
truly are now learn: Bernie Barney Boy, oh yeah, yeah, and not when you get to college in debt forgiveness, I mean you're talking about a hundred trillion dollars that really he's just not showing the other side of the ledger and as an economist that not bother you, I was like he's way out on a limb, maybe if he would it started with one thing I gotta get behind it like: let's tackle healthcare, maybe I'm I'm there, like. We were wise. We watch, I gather- and I were both liberal it I'm just like this- is a fantasy. What's he talking about here, he's just listed a hundred trillion dollars with this stuff in with their money doesn't exist, for that. Ok so the answer is: if you do it right, think about it right, it does exist, and not only does it exist. A lot of countries actually do it, including by faves that I already talked about Denmark already, does it or Sweden already does it or the Netherlands? Does it and so on? But the truth is we don't get too
those answers very well. The way we discuss things in a campaign or in our society and take health care. for example, I think Bernie I very hard to make this point and does continued at this point in its right could we are We're Medicare for all. Almost every rich country in Europe spends between eight and twelve, percent of the national income on health care. All in we spend eighteen percent of health care all in, why you know why simple every thing happens, whether it's a day in the hospital getting Europe digs out getting a cat scan is fifty percent more expensive, It is in Europe.
And where does the money go? Well, I can tell you in New York City, for example, in the not for profit system, the head, the hospitals are making, I million bucks or more. Not for profit, because we kind of got a rigged monopolistic system that does great whether its private or even so, called that for profit not for profit, just means the prophets, get paid in salaries, knotted dividends or nodded shares. We haven't. happen. While the drug companies would stop gouging us the cost of a hospital day, would be at a Medicare,
It at all, that's for sure. most of America, with like it a lot by the way to digress I once had to just an eyelash caught my eye when I was walking in Stockholm and it was hurting like hell, and we were inside and they looked at it and plucked the thing out in. waiting room, and I said how much does it spears. My hospital car, blob, mistress, This is for free. We don't charge for things like this. Thank you go on your way, wow. I like that there was no hope. I no deductible no charging my insurance company, no, nothing, because that's the civilised normal way to do it. Ok, what's the conclusion, we would save, probably about a trillion dollars a year, doing what Bernie it's not spend more less. The amount
going through government would go up the amount going from our power, Kids would go down way more then we would be painted from so our net bills would go way way down. Joe, he was charged, oh you're gonna bet what does because governments, to spend more and he kept saying yeah, but you understand you don't have any insurance premiums, you have no co pays. You have no out of pockets, you win, Having left it's gonna save you money. I said He launched that it in invented Vermont, I said: can we afford Medicare for all? We can't afford not having it for going broke by are overpriced healthcare system. So then you go one by one. This stuff is payable or we're going to pay. Through the Wall Zoo in absence. only devastating climb crises or other things, but the
Ruth is, it would be nice in a campaign to What all of this out- and I did say- and I always do say, present a budget that shows how to do this, because it can be done. That's kind of my macro thing, which is so. What is the budget? Look like how's it going to be paid for and all the rest, but the answer is it doesn't work. In that we need to do these things yeah, it's not too expensive. they have a fairer society. how many more in my vision of things, True, the bees doesn't add up with a hundred forty billion dollars in his bank account anymore. It's true that the head of the for profit houses, them doesn't take on five may dollars next year. There are some quote losers, but
I've done a careful study. You don't really need a hundred forty billion to live decently, yeah may I mean one of the things I want to talk about? It's like you didn't acknowledging that the economy is a story that money currency is a story value. Is a story, Agree to it and it works, I mean you can look during the civil war, when we decide to not have our currency linked to a hard asset like gold at that time, that was so controversial and what it ultimately did was it, it may growth kind of infinite and it made wealth kind of infinite when you decoupled from a finite resource. Yet there's another voice in my head that says this is kind of just like gold, like we all agree to it. The really the only detrimental thing, new and economies that we believing in right as long as we believe in the story, the story
and perpetuate and the only thing that really collapses economies when people stop believing in it, in that way. It's one of the trippy is concepts out there that it's all in your mind, it's all theoretical, like you, keep trying to couple it to these these hard, tangible things, but honestly, it's not that well, but it a lot of subtle questions, but, let me let me say the following: we can't imagine life just being better and it just is better out of nothing. It could be better because we stop fighting each other or do we get the pandemic your control or we invent a new technology, but money or how we call it won't change that by itself. So imagining money, wealth in the sense of changing
believing in money as a social convention is a bit these green pieces of paper, and we work like crazy or actually give up things. We really light for paper, and it is as we know that we use it for something else and get something that we want. So in this sense money is a social convention and it is all So true that Sir times that social convention collapses. I gotta get out of this cause, no what's taking it. Why are they take? It offers no what's taking because no what's taking it, so you become a self fulfilling run on the card see and I worked on places. That there was a kind of panic run on the currency and our currency, as you wisely and rightly say, doesn't have backing to wait. It's called a fear money, the dollar
We really haven't been on the gold standard since nineteen thirty, three thirty four, when The art took us off the gold standard in the great depression, Yet money works its the true. If you print too much of it, you can have inflation. I'd seen that work done, those issues and it's all true. And really weird that you can just I'd have conjure wealth out of nothing if you tap you're here, three times and say I believe it Bitcoin. I believe at this point I believe Bitcoin and big. Has nothing behind it. It doesn't have the euro, hoping actual It really is nothing yet not even not hearing that piece of paper and its worth in capital value. It's been worth, I dont know what it is right now, but a hundred billion plus of people that whole this stuff and they have
because they believe other people hold it, it doesn't Make our life any better by the way in, in fact, very subtle way. It takes away from those of us who are holding those green pieces of paper,