Sam Harris speaks with Dambisa Moyo about the state of the world. They discuss public goods, economic growth, capitalism, American economic history, bad public-policy choices, inequality, tax avoidance among the wealthy, government inefficiency, the problems with democracy, the breakdown of trust in institutions, failures of transparency, voter participation, future automation and unemployment, identity politics, the reality of racism in America, the problems with affirmative action, competition with China, and other topics. If the Making Sense podcast logo in your player is BLACK, you can SUBSCRIBE to gain access to all full-length episodes at samharris.org/subscribe. Learning how to train your mind is the single greatest investment you can make in life. That’s why Sam Harris created the Waking Up app. From rational mindfulness practice to lessons on some of life’s most important topics, join Sam as he demystifies the practice of meditation and explores the theory behind it.
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The last episode was an AMA, which I think got somewhat overshadowed by the first 20 minutes where I responded to all the vaccine hesitancy which I think got somewhat overshadowed by the first 20 minutes And Anyway, those of you who listened to the whole thing seemed to enjoy it, so I will do more AMAs going forward.
It had been a long time.
And generally use that forum to respond to more topical stuff.
Well, today's podcast is really on the state of the world entirely, mostly through an economic lens, but also political, because today I'm speaking with Dambisa Moyo.
Dambisa is a prize-winning author of several bestsellers, The Edge of Chaos, Winner Take All, Dead Aid.
Her most recent book is How Boards Work.
She is an economist, trained at Oxford.
She also has a master's degree from Harvard, from the John F. Kennedy School of Government.
I think she has an MBA as well.
Time Magazine has named her one of the 100 most influential people in the world.
She's worked for the World Bank and Goldman Sachs and serves on a variety of corporate boards.
And she regularly contributes to the Wall Street Journal and the Financial Times.
Anyway, as you'll hear, Denbisa gives me an education on many topics.
We discuss public goods, economic growth, capitalism, American economic history, bad public policy choices, Different forms of inequality.
Tax avoidance among the wealthy.
Government inefficiency.
Current problems with democracy.
The breakdown of trust in our institutions.
Failures of transparency.
Voter participation.
The future of automation.
Identity politics.
The reality of racism in America.
And then we have a very long discussion about affirmative action and its problems, which I found very interesting.
And we also talk about the rise of China and what that means for America.
Anyway, I love this conversation, and I hope you do as well.
And now I bring you Dambisa Moyo.
I am here with Dambisa Moyo.
Dambisa, thanks for joining me.
It's a pleasure.
I'm glad to be here.
So, you have one of these ridiculous CVs.
It's quite amazing who you are on paper.
I want to get into that, but before we summarize your academic and intellectual and professional background, give us your origin story.
You were born in Zambia.
What was your upbringing like?
So you're right, I was born in Zambia.
I think the old-timers might recognize it as northern Rhodesia.
The country became independent in 1964.
Some high-level statistics, it is a copper exporter.
About 97% of exports, maybe a little lower now, come from Come from copper exports.
Um, we are a former British colony, so English is the official language.
I was, uh, born and raised in Zambia and, uh, you know, it's, it's changed so much even in, in my lifetime.
Um, I'm 52 years old now, but the interesting thing is that in, uh, the, the rules in basically the law of the land in, uh, in Zambia was that blacks were not issued birth certificates until, uh, 1973.
And it was a sort of artifact of the colonial era.
So to this day, I have no birth certificate, but I do have an affidavit, which is very clearly states that what I just said, which is that birth certificates were not issued to black Africans.
And so it's been a wild ride.
My formative years were in Africa, in Zambia.
And, you know, primary, secondary and university.
We had a coup in 1991 where there was an attempted overthrow of the government.
But before that, we had been in a one-party state, which was run by a man who just died a few weeks ago, Kenneth Kaunda.
And basically, it was a relatively peaceful existence.
We were very much on the front lines of the struggle for independence for the African region, particularly Southern Africa, South Africa, et cetera.
So a lot of the ANC freedom fighters were...
We actually lived in Zambia and President Mandela, upon his release, the first country he visited was Zambia to basically acknowledge that.
So, you know, in terms of my specific upbringing, I'm the first child and first daughter of two people who were born and raised in rural Africa from two different tribes, two different parts of the country.
But they met and married at university.
They were two of the first 11 black graduates allowed to go to university in Zambia.
And so my parents, I mean, if you think about it, 11 blacks in the class and two of them were my parents.
It's quite a remarkable story.
So, you know, 20 years later, I went back to that same university to start my own university career.
But, you know, on the whole, very fortunate in the sense that my parents Well-born in poor rural Africa had an opportunity to get an education, and that really put the basis in play for myself and my siblings to get an education.
And to be here today in just, you know, just over 50 years, quite amazing to be on the Sam Harris podcast.
Well, this is not your crowning achievement, as we will detail in a second.
So how do you summarize your intellectual and academic background at this point?
What are you doing?
I know you serve on several boards.
Give us a snapshot of where you're placed in the world.
Yeah, so my PhD is in economics from Oxford University and so I guess I view myself first and foremost as a macroeconomist.
I nevertheless have spent about 10 years on working at Goldman Sachs on Wall Street and then another almost 10 years on the board of A bank, Barclays Bank, one of the large global sort of important significant institutions in the banking industry globally.
And so in that respect, I feel like I was sort of born and raised in finance.
And although I have subsequently spent a lot of time serving on the boards of large global and complex organizations such as Chevron and Energy, Mining companies, industrial companies like 3M who are making the masks and the ventilators during the COVID pandemic, but also fast moving consumer goods as well as technology companies.
So it's been quite a varied experience over the last decade in which I've sort of evolved from being Specifically, an economist working in the area of finance into now much more of a jack of all trades in terms of thinking about policy issues, thinking about how public policy as well as the private sector think about allocating capital and navigating through challenging times.
So you and I recently met at a dinner party, and I've referenced this gathering a couple of times on the podcast without naming any of the participants.
I guess I've just outed you as a member of this star chamber.
So for better or worse.
The conversation we had there was pretty instructive for me because it was a remarkable snapshot of the thinking of some very powerful, connected people about this trend we're seeing, especially in American public life, around a very illiberal activist culture capturing our institutions.
I'm going to want to talk to you about that, but I think let's save that to the end of our conversation, because there's so much more to explore, given your expertise.
Let's start with big picture concerns around the global trends that most concern you at this point.
Let's maybe take the economic side first.
What does global economic growth look like now, and how do you see that relating with any geopolitical concerns we might have?
The rise in populism, the weakening of institutions, the weakening of America in particular.
I want to cover all of this, so give me your view of the world from 30,000 feet.
So, you know, perhaps unsurprisingly, as an economist, I'm deeply concerned about the question of economic growth.
Economic growth is critically important because it really does help us solve macroeconomic problems such as living standards, improving people's living standards over time.
But it also helps fund public goods like education, national security, infrastructure, Health care, although I know in America health care is a question of whether it's a public good.
Actually, Dembisa, would you, you just listed a few, but would you define what you mean by a public good?
Sure.
So a public good, I mean, to me, the most basic and sort of straightforward way of thinking about it, it's something that we all benefit from, but no one of us pays for.
So something like a road, you and I can use the same road, but we didn't pay for it.
We may have contributed to it through our taxes, but we didn't pay the full freight for that.
And it's similarly, If you think about things like education or national security, big, big expensive programs that government seeks to undertake to protect, but also to support an economy and a society, somebody has to pay for that.
And, uh, and really it's through partly through taxation, but also through government borrowing that public goods tend to be funded.
So my point is that in order to have a tax base, your economy needs to be growing.
The pie has to be expanding.
So that we can tax and use that money to fund these public goods, education, health care, infrastructure, national security.
And of course, to my mind, we're seeing that list expand when you have things like climate change.
Which again is a public risk in some sense, because not one of us is responsible for the full onslaught of the challenge that we're dealing with, but the truth is we've all somehow contributed to it.
It's sort of a negative externality.
So that's how I think about growth.
And look, here's the rule of thumb with respect to growth.
In order for a country to double per capita income, so to double the income of the average person, In one generation, and the generation's about 25 years, you need the economy to be growing by 3% per year.
And even before COVID hit, we were already seeing many economies, large, small, developing, you know, democratic and non-democratic, already struggling to make that 3% number.
So just to give you some examples, Germany in the fourth quarter of 2019 had 0% growth.
The UK was at around 1.2 to 1.4.
And then you have very large emerging markets, economies like Brazil, Argentina, South Africa, Russia, that since the financial crisis have struggled to get beyond 2%.
So really, snapshot was already pretty bad.
We were already worried about growth.
We were worried that public policy had become quite impotent.
By that, I mean, governments had already had enormous amounts of debt on their balance sheets, but not just government, households, corporations, As well as how student loans, auto loans were all over a trillion dollars.
And then with respect to monetary policy, we know that after the financial crisis of 2008, interest rates have been at historical lows.
In fact, they're negative rates in Europe as well as Japan.
So very, very challenged situation in terms of slow growth.
Challenged situation in terms of public policy's ability to effect change.
And then if I may, Sam, just add on one additional thing that was causing so many challenges for us and continues to do so, is a confluence of factors that was creating a greater drag on economic growth.
Things like climate change, Issues around demographic shifts.
There are going to be 11 billion of us on the planet.
India is adding a million people a month to her population.
We were already worried about technology and the risk of a jobless underclass.
Already deep concerns around productivity decline.
So the ability for people to contribute to GDP was stalling.
So all of this happened before COVID.
And now we then end up with COVID, which I would argue has actually been catalytic and making things much more precarious than in terms of our ability to generate growth and to solve these problems.
And in fact, has has sort of hastened a lot of the challenges that we've been worried about in economics.
I think that this is the basis of what you just said could be counterintuitive for many people.
To make a point of contact with what we'll talk about later, this culture of activism, there's a fundamental skepticism around capitalism itself as being a salvageable system for improving the well-being of humanity, and producing wealth is obviously part of that picture.
In everything you just said, you have taken for granted a kind of imperative for growth that I think many people, certainly younger people who are skeptical about capitalism as a system, would find counterintuitive.
I mean, it just sounds like the global economy is just this vast Ponzi scheme, which It has the mechanics of its own failure built into it.
Why is there this growth imperative?
Why is growth even necessary?
And how do you view this fundamental skepticism around basing our economy on capitalism in the first place?
So that is a wonderful question.
And I think that, unfortunately, our public policymakers have not done a good job of articulating why growth matters.
But even more than that, they've not done a good job of really highlighting the times and places where we've made mistakes, of which have been many.
I'll come to those in a moment.
I should say just to telegraph, you know, ahead of time, you know, the vast majority of the problems that we're dealing with in terms of public policy and weakness in the economy have really very little to do with China.
But China, for example, has become a boogeyman.
And what it means is that we're not really doing the hard work that's necessary for an economy to thrive and survive over the long term.
But, you know, your question is a very fair one.
You know, why?
Why is it the case that somebody like myself continues to speak up about growth?
And a lot of that has to do with having lived, worked and traveled to over 80 countries, developed and developing as you as we just I highlighted, but also economies that have chosen other paths.
And there's absolutely no doubt in my mind that a system that allocates capital and resources, which by and large tend to be scarce, in a way that is driven by innovation, driven by not cronyism, is the system we ought to aspire to.
And capitalism is really based on that.
Now, just to be absolutely clear, the type of capitalism that we have practiced has tended to pursue shortcuts.
And we can come to that.
So governments reaching for more amount of debt, which, you know, short term looked attractive, tax breaks, etc.
But longer term, we're not investing in infrastructure or education or future generations.
But also, it's important to say that the lack of Long-term thinking has led us to reach both in terms of corporations, but also governments for short-term solutions that don't fully reflect the trade-offs and the challenges of delivering economic growth at scale for many companies and countries.
So if I may just pick at this a little bit more and then I'll send it back to you.
So China was the largest economy in the world.
in GDP terms in 1820.
And they made a number of catastrophic policy errors that really cost them.
Today, China is the second largest economy in GDP terms, but it still remains one of the poorest economies in the world in terms of a per capita income basis.
In fact, it's poorer than many countries in South America and Africa.
So here you have from 1820 to 2021, where we are today, and they made enormous policy mistakes.
itself has made policy mistakes in the era post the Gilded Age.
So from the 1870 to 1900, you see a lot of economic growth, a lot of exchange and trade, and movement of capital, movement of people, so globalization as we know it today.
We saw a lot of the rise of corporations relatively laissez-faire government.
But that era of the Gilded Age was punctured by a number of things, the Spanish flu, a war, and the financial crisis.
And what subsequently happened was progressive politics, very similar to the type of progressive politics that we're hearing about today.
People wanted bigger government as an arbiter of capital and labor.
People wanted to see smaller corporations.
They wanted them broken up, more antitrust, less globalization.
And I'll tell you now, that left the United States in an economic malaise for $25.
five years, from 1930 to 1954, you had low growth, high unemployment, And if you look at just the Dow Jones Industrial Index as an as one indicator, in 1929, it peaked at 381 points.
The next time they saw 381 points was in 1954.
So you saw a stalled economy.
And it's true that we had a breakdown of globalization.
So we had smooth holly policies that were very aggressively anti foreign goods and services coming into the U.S.
Very aggressive anti-immigrant stance, which we're hearing again now.
Just to give you some numbers, in the Gilded Age, that 1870 to 1900, the percentage of foreign-born Americans was around 13%.
That number went down to 6% in this malaise or progressive period I'm talking about.
It is true that government became bigger.
We have a lot of the welfare programs in the United States, Social Security, Medicare, Medicaid, really built up in that period of 25 years.
But if you look at unemployment rates, economic growth, etc., it actually is a period of real regression, I would argue, in the United States.
So then what happened in the 50s to turn it around?
Well, it's funny you ask because, and I hope this doesn't repeat itself, but what you had were a couple of things.
First of all, you had a war, which ended in 1945.
Which actually drove a lot of the industrialization and innovation of technology in the United States.
It brought women into the workforce in large scale.
But you also had a real concerted, unified effort globally with the establishment of Bretton Woods, for example, which became the parent of the IMF, World Bank, UN, et cetera, really come together and argue that we needed to see much more unified global approaches.
So you see more trade emerging.
And the period from 1950 to 2008, very symbolic, what I'm going to call the golden age, is very similar in terms of, very similar to the gilded age, in terms of high economic growth, large corporations, relatively less effort for government, large corporations, relatively less effort for government, lots of trade, lots of capital flows.
And, you know, we've all been around for this period.
So we've seen a lot of those gains.
However, Those gains have not been distributed fairly and widely.
And that's where the problem emerged.
Governments had massive tax revenues.
Instead of investing in infrastructure, they invested in wars.
So just an example, in the United States, the infrastructure is graded D+.
By the American Civil Engineer Society.
That has nothing to do with China.
That's a deliberate choice by the American public policymakers, Republican and Democrat, over a period of time, choosing that their marginal dollar was not going to go into infrastructure.
So what does that mean?
It means today, not only is the U.S.
greater than D-plus in traditional infrastructure, like ports and railways and roads, But also we are set really behind from China in more innovative new technologies and more new infrastructure.
And we're playing catch up.
In fact, things like facial recognition, AI, for many of these were actually considered behind.
And so public policy is trying to catch up with that.
There are other examples of public policy decisions that were a folly and they've created a problem that has really gone to the guts of the American middle class.
Things like underinvestment in education.
This country, according to a McKinsey report, the global consulting firm, is going to be minority-majority by 2050.
But if you look at the under-investments in education, Blacks and Latinos in particular, who will be the majority, it could put the country in a permanent recession.
Because largely these populations are ill-equipped to compete in a much more techno world.
And it's not just Blacks and Latinos.
We know about, from Hillbilly Elegy, the likes of Appalachia and pockets of America that have been written about extensively, white America, where their living life expectancies have declined, opioid use.
I mean, it's a corrosive degradation of society, which again, as I mentioned, has a lot to do with bad public policy choices, bad policy decisions in corporations, as well as society writ large, and has relatively little to do with China, even though China is the one that we focus on.
Okay, I think we're going to have to give out antidepressants with this episode of the podcast.
Hopefully not.
So yeah, I mean there's so many topics you just raised that in the fullness of time I would like to discuss, but let's focus on wealth inequality for a moment.
And I think it somewhat relates to an illusion of continued growth that many people suffer from.
When you look at the stock market now, it seems like we don't have a problem of growth.
The economy looks like it's booming.
It looked like it was booming during COVID.
Obviously, the stock market isn't the economy, but what we have is an economy.
Globally speaking, this is probably true.
I mean, you can tell me how true it is globally compared to within any given society, like America.
There is something like a winner-take-all or certainly winner-take-most phenomenon now where the gains in productivity, the growth such as it is, is accruing to the 1% and even to an asymptotic degree to the one-tenth of 1% and beyond.
How do you think about wealth inequality now?
So I think that first of all, the issue is not just about wealth inequality.
I think the issue is inequality in general, because the problem with inequality is that it means that people have less access to education, health care, political rights, opportunity writ large.
And so, you know, I know people love to focus on wealth in of itself.
And I do see that very much as an easy target.
There's a, in my book from 2018, Edge of Chaos, I talk about how Oxfam, the charity, had cited that, you know, just a couple of years ago that the eight wealthiest men, they're all men in the world, had more wealth than the bottom 50% they're all men in the world, had more wealth than the bottom 50% of And there are many of these types of statistics we're familiar with, even within the United States, but also between countries.
sort of excess and inequality.
But I do worry that sometimes the term inequality and how it's defined does conflate a number of issues.
And it's also easy to be confused about the distinction between wealth inequality and income inequality.
Correct.
And those are quite distinct.
Correct.
And look, I'll say right out that I think for every argument that somebody like myself Who's more a believer in market capitalism, obviously understanding it needs to be regulated, it needs to have good policies behind it.
But I lean into a much more capitalist type mindset.
There will be people who argue vehemently and quite compellingly to the untrained ear, I would say, that, you know, that the root of the problem that we see in capitalism or inequality today is inherent in capitalism in of itself.
And so government needs to do more on that.
You know, let's put the debate to a side for one moment.
Let me just highlight a couple of issues with focusing on.
In fact, I'll highlight two issues very quickly with focusing on this idea of wealth inequality or inequality without really getting into Into the weeds.
So first of all, as economists, we don't know the answer on how to solve inequality.
And I say that with with temerity, but also some humility in there, because I think economists and public policymakers love to sound like we have the answers just not being executed upon.
We are looking for short term solutions to what is effectively long term problems.
We have tried left-leaning solutions, tax and redistribution.
Those have not worked in terms of stemming inequality.
We've also tried more right-leaning supply-side interventions where we've cut taxes and we've sort of tried to spur investment.
I can assure you those have also not led to greater or rather less inequality.
So we are kind of stumped because, you know, I think we are looking for some quick fix.
Oh, if I tax and redistribute or if I cut taxes, you know, Bob's your uncle, we're going to have inequality reduce.
And that has just not happened.
So if you ask me what kinds of things could help solve this inequality problem, they're not appealing because they're all long term.
They require intergenerational choices.
Things like investing in education, investing in infrastructure, in innovation.
You know, the American historians.
So that's one problem.
construct, you know, over 200, 300 years has really been one of investing in the future.
And yet this generation of Americans for the first time in the history of the country is less educated than the preceding generation.
So that's one problem.
The other issue is when we say inequality, you know, we aren't really being articulate about whether or not we're talking about inequality within a country versus between countries.
And the reason this is quite interesting is that here, this is one of the, to me, one of the biggest conundrums that we're facing in society today.
We are living in a live experiment.
Number one and number two largest economies in the world are the United States and China, respectively.
The United States is a market capitalist society, and by and large has chosen democracy as its political ethos.
China, second largest economy in the world, has deprioritized democracy and has state capitalism as its political approach.
And these two economies, two different political systems, two different economic systems, but they have the same Gini coefficient, which is the measure of inequality, around 0.42.
So if you come from, like myself, somebody born and raised in Africa, or you're in South America, and you're looking for which paths to address inequality, you don't really have a clear line of sight of what policies actually deliver better outcomes.
Because, as I mentioned, the story is quite murky and neither the left nor the right has delivered emphatically an answer to how do you actually limit inequality, certainly in the short term.
Because as far as I'm concerned, we know longer term it's about investment in the future.
Well, couldn't someone from the left charge that we really haven't successfully tried adequate redistribution?
I mean, you must be aware of the ProPublica scandal of recent months where they published the tax returns of the richest people in the U.S., and it was revealed that You know, even Warren Buffett, who has been such an articulate champion of revising our tax policy in favor of redistribution.
He famously said, it makes no sense that I pay a lower tax rate than my secretary.
You know, he distinguished himself for paying, I think it was an effective one-tenth of one percent on his earnings through that period.
We have a tax code that is so full of loopholes for the wealthiest people that what we've witnessed is just a successful gaming of a well-intentioned policy, but not the effective implementation of that policy.
You're not hopeful that if we actually could get the richest people in every cohort down through the middle class to pay a proper citizen's share to the common good, we would live in a different society?
I think so.
I am empathetic to the argument that, you know, everyone should pay their fair share and their needs for sure absolutely needs to be more tax reform in this country.
You know, I say this again with great humility.
I have two masters and a Ph.D.
from arguably some of the best schools on the planet.
And even I struggle to understand what the heck are these forms talking about when I'm filling in my taxes.
So there's clearly a lot of work that needs to be done there.
And yes, there are, I'm sure, many Loopholes and ways to game the system that even I'm not familiar with that people are taking advantage of.
So, yeah, I'll give you that.
But I think in many respects, it is a red herring.
What we need is government efficiency.
And this is where, again, I find it quite disheartening, especially coming from places like Africa where, you know, or living around the world where I've seen and it's kind of well known that government just does a bad job at allocating resources such as capital and labor.
You know, I was very struck by something that Mike Bloomberg has allegedly said, which is around what he thinks the efficacy of what an efficient government should look like.
This is it should be a government that is data driven, forward leaning, focuses on measured outcomes and is not corrupt.
And the reality is, I'm afraid to say that, you know, even Western governments are not ticking those boxes.
We don't see them being Data-driven, they tend to be always playing catch-up and being reactive as opposed to proactive.
They aren't forward-leaning.
You know, I gave you an example.
They weren't invested in infrastructure around technology.
They're playing catch-up, you know, and this is just not acceptable for a leading economy.
They don't focus on measured outcomes.
There's a lot of evidence around the underperformance of education, but we were almost beholden to to vested interests in education, in health care, and other areas that are leading to bad outcomes and bad policy decisions.
And of course, with respect to corruption, I mean, how many times, time and time again, we expose pockets of corruption.
So I'm afraid that more money in a system that is still wrought with these issues, to my mind, is not necessarily a solution.
You know, I love the phrase that revenue hides a lot or solves a lot of problems.
But But you know, at some point, there's something to be said about efficiency as well.
And we just are not doing as good a job as I would say previous generations have done in terms of building out the interstate network, building Silicon Valley, you know, the real innovation that The United States has been known for, I just feel, has really whittled away.
And I should be very clear, Sam, I'm not giving up on the U.S.
I think the U.S.
still is a country which likes to right itself or does right itself when it goes too far.
In the sort of self-harm.
But, you know, if ever there were a time when the yellow masks in the plane should be coming down to say we really need to do something fast, I would say, you know, this is it.
The U.S., the education statistics from the OECD piece are atrocious.
The United States in mathematics, reading, writing is at the bottom.
You know, it used to be number one, two and three.
Now it's number 27, 28, 29.
We're being, you know, railroaded and overcome by emerging market economies on the regular.
We've got so much debt.
I mean, it's insane.
And yes, it's true that there've been some reasons, compelling and defensible reasons for us to raise the debt levels given COVID, given the financial crisis.
But at some point in time, we can't continue to, you know, assume we'll always be a reserve currency.
Assume that other economies, other systems of financial, you know, networks and architecture could emerge that could put us at a distinct disadvantage.
And, you know, all the while we are playing politics every two years.
You know, there's just no common discussion that, to my mind, is not really the sophisticated level of discussion that is required for a leading country to continue to lead.
And maybe it's happening, you know, behind closed doors, but it's pretty disheartening to see what's happening in Washington and with institutions and society writ large.
Well, given that you're behind many of those closed doors, I'm not hopeful that it is happening there, if you're not seeing it.
So much of what you said suggests that really we have a fundamental problem with democracy, or at least democracy as it's currently formed.
I mean, it's just our inability to focus on long-term problems.
is anchored to what you just described as the short-term political time horizon of every full-time politician.
I mean, it seems like people get elected simply to then get reelected, right?
And they have, you know, they have about 15 minutes to focus on solving problems before they then have to worry about the next election.
So...
But we also, as citizens, we reward that.
You know, we ought to be much more savvy, much more attuned to the fact that getting a tax break today just is postponing the inevitable.
We're going to owe that money back sometime in the future.
We need to be more aware that when our government borrows, they're borrowing from China, which is the largest foreign lender.
To the United States government.
It does flip between China and Japan.
But basically, China, who we insult, we get into fights with on a regular basis, is holding, you know, potentially the largest amount of foreign debt.
It means that we're not having economic conversations.
We're having geopolitical conversations and risks to our society that are, you know, as you say, goes to the heart of our democracy.
You know, not just the long term problems, but also low participation rates.
Yeah.
How is this connected or is it connected to the weakening of institutions and the rise of liberal democracies throughout the world or the rise of populism?
It seems like with respect to people's consumption of information now and just are inability to acknowledge a common set of facts on any topic of significance, whether it's, you know, whether or not the 2020 election was run properly, or whether it was stolen, whether COVID is worth taking seriously, whether vaccines are safe, or we just
We're on a kind of a runaway train of misinformation, conspiracy thinking, half-truths, lies, all of us being supercharged by social media and a breakdown of trust in mainstream media and obvious failures in mainstream media organizations to do their job.
What are the points of greatest concern here and what can you imagine us doing to correct course?
Well, so it is deeply disheartening.
And, you know, at the risk of sounding like a broken record, it's particularly disheartening for someone like myself, who's come from a poor country, comes to the United States, comes to the West with great aspirations to experience the fullness of Participatory democracy, you know, freedom in terms of not just political rights, but also economic rights.
And we need to see a breakdown in what I would say are two things.
One, it's a breakdown in belief and transparency.
There's just something this which, by the way, I should say both of these things, I believe, have happened over time.
It doesn't just happen.
In the last few weeks, so we have less transparency, our people's perceived sense of there's less transparency about where the decisions are being made.
Where is the quote unquote room where these things are happening?
But also if there's a lack of agreement on what is what defined what is defined as.
Not just data, but information.
What we where can we all agree on in terms of facts?
I was struck by.
Something a very good friend of mine told me some time ago that the breakdown in transparency when really in the United States, the sort of scales fell off people's eyes was really around Watergate.
So they would argue that that was really a turning point when people realized, wait a second, we are being manipulated by public policymakers.
They're spying on each other.
They're manipulating him for that.
That was a watershed moment in terms of transparency.
There's no doubt in my mind that the watershed moment regarding information has definitely been catalyzed by social media.
The ability for people to make claims and statements and not be held accountable.
And by the way, in an anonymous fashion.
And people, there are other people who can make this argument much more eloquently than I, but to me has fundamentally altered our ability to judge what is data versus what is actually information.
But these two things have, as I mentioned, I don't believe only started a few years ago, even.
I think this has been a sustained and deliberate sort of attack of our democracies Over time that, you know, perhaps we, you know, ignored, wink, wink, nudge, nudge, whatever.
It wasn't that big a deal, but has been catalyzed now in such a fracture to society that, you know, it's deeply, deeply worrying.
But you ask me, what can we do about it?
And I think that's an important thing, because we can sit here and navel gaze and say, woe is me, but what can be done?
You know, in my book, Edge of Chaos, I talk about a bunch of reforms.
I propose 10 things.
I won't go through all of them, but really 10 ways that I think we can enhance democracy to address the problem of low participation rates, but also to address the problem of short-termism that's built into our system.
Again, we as citizens are rewarding our policymakers for taking these short-term decisions.
We get promised a tax break.
We're rushing out to vote for these people.
without real due consideration for the consequences later on.
Sure.
So let me just maybe highlight a couple of things that I think would be quite interesting to explore.
I should say two things about what I'm about to say.
One is that the list of 10 things that I propose in that book are not sort of that innovative, meaning somewhere on the planet, and I state where they are already using these tools and they've been tried and erred, And so in that sense, we have some semblance that they could work.
But the other thing is that I'm not so inured to living and having worked in the United States to recognize that some of the proposals might be viewed very much as anti-American, meaning they just fly in the face of what Americans believe.
And let me start with that one.
So low participation rates.
And the fact that a lot of public policymaking has been captured by big money.
We know this.
I don't need to make the arguments.
Billions of dollars spent to fight campaigns.
We know about the packs and the amount of money that goes to candidates.
So we know that argument.
This is, I believe, has contributed to low participation rates.
And, you know, so just to give you some data, at low income households that have $30,000 or less, the average participation rate is about 30%.
In elections, that number was around 50%, just high 50s in the US.
But we have seen improvements, I must say, in the last few years.
But as the country's become more divisive, we've seen actually more improvements in this.
But one example of something that we could do is, so in order to really go for the one man, one vote, we could have mandatory voting.
I understand this flies in the face of Americans who feel, hey, I have the right to vote or not vote, or it's my decision to choose what I want to do or not do.
But there are around 20 countries around the world that have used it to great effect.
You get everybody's votes.
It does matter for public policy outcomes.
And I think you can do it in a way that actually enhances political discourse so that you don't have politicians rightly for their own goals pursuing wealthy people and not really caring about what the average person thinks.
So that's one example.
Actually, if I can ask you about that, Demi, it's not obvious to me why that's so important If you just imagine that, I think correctly, that most voters will be fairly uninformed about the issues.
Why does getting more and more of everybody who will be on balance, uninformed, add anything but noise to the signal?
I mean, couldn't one argue that it would be better for a Smaller percentage of a society to vote if that percentage were People who are actually informed about issues and I'm thinking of things like brexit and you know other referendums that go haywire Yes, so well haywire.
Some people would say haywire.
Other people would say went exactly the way they wanted.
Yeah, exactly Yeah, um, but but you know touche and I think it's a very good point because and I do funny enough one of the 10 proposals in the book is Making the argument that we should be looking at Specific people voting, only being allowed to vote for certain things.
So, I'll give you a very quick example.
I think I'm a pretty informed... Go ahead.
I just want to say that my comment was not as elitist as it might have sounded, because I think this applies to me.
When I look at my voting behavior, when I confront a ballot and there are all kinds of local initiatives and
Judges and people who I have not taken the time to vet even remotely are on the ballot You know, I consider myself someone who's unqualified to vote for many of those things and often pass them over Yeah, and and by the way, and that's and that is why I made this recommendation to one of the ten in my book precisely because I consider myself pretty well read pretty knowledgeable pretty
Informed about what's happening in different sectors, even outside of economics.
But the truth is, if someone said to me, Dambisa, here's one dollar, a marginal dollar, I have no idea where that is best spent in the health care system.
I don't know if we need to hire more nurses.
I don't know if we need to buy more pills, more beds, more doctors.
I have no idea.
But I have to believe that people who work in that field, Physical therapists, doctors, nurses, etc.
will have more information than I. And so there is there are countries that are trying this places like Switzerland, in Canada, I believe it's in Toronto, they've tried to, they're flirting with this idea of saying, hey, wait a second.
It could be knowledge-based.
And by the way, just for the avoidance of doubt, I'm sure there are people who are listening to this and their heckles are rising because it could very much sound like harking back to a period where, hey, we don't want blacks or we don't want women to vote.
That's not at all what I'm suggesting here.
But what I am saying is, is there a way for us to get better outcomes on public policy.
And certainly this is a debate that I think we should be having.
But to your specific question, Sam, which was, you know, why is it the case that having a broader base of people who are ill-educated voting, why that might enhance our outcomes?
What I was addressing was enhancing democracy.
So democracy is one, quote unquote, man, one vote.
And all I was saying is that we are now in a situation where we've got weighted voting and the weighted voting is money-based.
It's not knowledge based.
And that scenario comes with its own problems because what we're seeing is exactly what you just said.
The stock market is rallying.
That means the world must be righting itself.
Well, guess what?
Only a large proportion of the country's population is not even invested.
In the stock market, so it's, you know, the public policy, the things that public policy looks at to point at as economic success, the things that society focuses on and especially public policy focuses on as progress are things that perhaps unsurprisingly.
are basically the things that people who are wealthy, who influence public policy outcomes, find important.
So all I'm suggesting is that if you want to have a much more egalitarian society, where, you know, the average education system is better, the average, you know, healthcare system is better, then you need to bring in those voices.
Because the truth of the matter is that that one tenth of percent probably doesn't really care And I'm being simplistic in the interest of time, doesn't really have an axe to grind or doesn't really have a dog in the fight for low education standards.
An argument could be made that they should care because they're living cheek by jowl with people who don't have access or who are suffering.
But I'm just saying that in the interim, I'm trying to enhance the number of people participating in democracy because I think we could get better outcomes.
How much of our current economic woes in the U.S.
and present and near future do you think relate to automation and the evaporation of jobs that either are not replaced or are replaced by worse jobs?
It seems to me that when one worries about the trend line here and the future in which we build better and better machines, Well, one is usually met by what I consider to be bad analogies to prior advances in technology.
This often comes from your fellow economists that people will say, well, it used to be that whatever, 60% of Americans worked in agriculture and now it's...
You know, I forget, 6% or less?
Yeah, it's less than that.
Yeah, less than 3%.
And so, yeah, these people found, we don't have a crisis of, you know, farmers who couldn't figure out what else to do with their lives.
They went into manufacturing.
Yeah, and then services.
I know the argument.
And then 18% have ended up in manufacturing.
About 80% have ended up in service sector jobs.
I know exactly the argument.
And so your question is, you know, how worried am I?
I'm not I haven't been worried, but we should be worried.
Because if anything, if we think about what are the lessons learned from the pandemic, Digitization, the deployment of of of human workers and labor and really that sort of greater transparency into who actually is adding value.
If I can put it as crudely as that to an organization, I think it's become much more.
Revealed.
And the question about automation, I would argue, in some of the boardrooms in which I sit, has really rapidly moved from, hey, technology advances are really about thinking around cyber risks and downside concerns into, wait a minute, we can actually reduce our cost overheads in terms of the buildings that we rent and lease.
our footprint of how many planes were flying, business costs, et cetera, by having fewer people do more work.
So I think there's been already a shift in conversation.
It was bound to happen.
The World Economic Forum has been talking about 85 million jobs that were going to get replaced.
And I do think that in the scenario that we talked about, going from 60% agriculture in 1900, moving to manufacturing, then services amount to R&D.
The difference is that we don't know what sector could absorb This population of workers in those other sectors, we were aware, we knew that people were moving out of agriculture because of both push and pull factors that took them into manufacturing.
Part of it is that war we talked about in 1939 to 1945, the whole World War II infrastructure moved people out of farming, more out of farming into industrial Jobs and but that we know what has happened.
The problem is it's not obvious where a large proportion of unskilled workers could land because the skill sets required for these new jobs is much higher.
I'll just say one other thing here because it's that what I've just said is really about It assumes that people are out there looking for work and are not finding it.
There's another disturbing data point, particularly seen in the US post the financial crisis, which is that the labor participation rate in this country has actually gone down.
And it's quite sticky.
And this is basically how many people have basically decided, you know what, I'm just not going to I'm not going to look for work anymore.
And there is actually essentially withdrawing their labor.
Part of it could be because of furlough schemes and COVID, basically people reevaluating their lives, not wanting to work as hard or work in certain circumstances.
I mean, there's a whole list of arguments, maybe even technological changes.
But the net net is that not only are we demanding higher skills, Going forward from the people who work, but we also have a situation where the human worker is withdrawing their work number, their work services.
And I think both of those lead me to be more concerned about a jobless future.
Well, there's so much to talk about here.
There are many other topics I want to touch with you, but I want to pivot to the quasi-political concerns that I started with at the beginning, and then we'll see if we have time for the rest, because I don't want to miss this opportunity to get all of your thoughts on this topic.
So, we're talking about a crisis of legitimacy in democracy, a crisis of legitimacy around the economic system of capitalism, a space of information and misinformation that's making it increasingly difficult to talk about any kind of ground truth on these topics or any other.
There's this growing reality of inequality of all sorts, income, wealth, education, access to health care, and it's both, as you pointed out, global and domestic.
I feel like The comparison is, you know, even if it's made between countries, it's not so psychologically salient for people, and people care much more about the proximate comparison.
You know, how am I doing with respect to my neighbors as opposed to how am I doing with respect to, you know, half the countries in Africa or Latin America.
I think it's probably true to say that there are people in American society who are much wealthier than many, even most people in the developing world, but who are in effect poor in our society and feel the full range of burdens of that poverty, psychologically and socially, in a way that they wouldn't if they were in a village in India.
Or Nepal or somewhere else, which is to say you can be better off in material terms and still psychologically worse off because, you know, the only software for running, you know, self-esteem on our hard drives is to make comparisons with, you know, the nearest examples of difference.
So, these problems are becoming even more difficult to talk about, think about, and take steps to mitigate because of what is just a level of political hyper-partisanship in our society that has just become Totally unworkable.
And again, you and I met at a dinner party where we were talking about the extreme polarization on the far left and, you know, referred to on this podcast and elsewhere as wokeism or social justice activism or identity politics.
I mean, there's various lenses you can put over this.
But there's a point of view in our society, you know, I think disproportionately expressed by the young and Well-educated, surprisingly, and often, you know, white and well-educated, that basically calls into question, you know, as I said, capitalism and, you know, it certainly stigmatizes wealth.
There's a belief that, you know, that there's probably no ethical way to become a billionaire.
I mean, the only way to be a billionaire is to have perpetrated some horrific fraud on society or to have inherited the money or, you know, some other means that is, you know, ethically indefensible.
There's, I think, a pervasive sense that any exercise of American power is illegitimate and probably diabolical on the world stage.
And this probably runs all the way back to our founding.
There's a sense that American society is irretrievably racist and That, you know, not only have we not made significant progress, in some ways it's never been worse than at this moment.
You know, the clock is, you know, two minutes before midnight with respect to the race-based inequalities in our society.
And so there's just a sense that we are at some crisis point with respect to the perception of the state of our democracy and society coming from the left.
We can leave the mirror image on the right aside for the moment.
And, I guess, let's focus, I mean, this relates to every perceived victim group.
I mean, we can, you know, this is true of women's rights and, you know, Me Too and trans rights and questions of gender, but let's focus on race for the moment and identity politics and affirmative action and, you know, all of these nested concerns and policies that that fall there.
I'm wondering what your perception as an African woman, you know, whenever I speak to Africans, I'm always impressed at what a unique perspective they give on race relations in the U.S.
What is your perception of our moment here and how we should be thinking about it and dealing with it?
Well, first of all, I'm glad that you made the, or stressed the point that I was born and raised.
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