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"Let's do the best things first" - Bjorn Lomborg
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International best-selling author Bjorn Lomborg has spent a career infuriating people by being sensible. He brought much-needed pragmatism to the climate debate, and he's now doing the same for international development.
In his latest book, titled 'Best Things First', he presents the 12 most efficient solutions for the world's poorest and our global SDG promises.
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Transcript
Introduction of Controversial Figures
00:00:14
Speaker
G'day and welcome to Australiana from The Spectator Australia. I'm Will Kingston. There are some people who I think are perplexingly controversial. Take Jordan Peterson for example. When I read his book 12 Rules for Life, I couldn't help but think that the rules were mostly common sense, verging on banal. But Jordan isn't the most perplexingly controversial figure I
Guest Introduction: Bjorn Lomborg
00:00:36
Speaker
know. That title goes to my guest Bjorn Lomborg.
00:00:39
Speaker
Bjorn is the president of the Copenhagen Consensus and the bestselling author of several books, including The Skeptical Environmentalist and False Alarm. These books have been a rare infusion of pragmatism into the dogmatic climate debate. In his latest book, Bjorn has taken that same pragmatic approach to come up with the 12 most efficient solutions to live up to the UN Sustainable Development Goals promises, and in so doing, improve the lives of the world's poorest people.
00:01:07
Speaker
It is appropriately titled, Best Things First. Jorn, welcome to Australiana. Well, it's great to be here.
00:01:14
Speaker
Just before we do dive into the book, I am curious to get your thoughts on that perplexingly controversial status.
Lomborg's Pragmatic Climate Views
00:01:21
Speaker
I've binged a lot of your media appearances in the last few weeks, and I've noticed that your analysis is peppered with comments like, it's a problem, but it's not catastrophic. Or in an ideal world, we'd love to fix everything, but we can't. So it's measured and it's free of absolutes.
00:01:40
Speaker
Given that, I am wondering, why do you think you've become a lightning rod for many people, particularly for climate activists? I think the short version is that a lot of people feel like there are things that we absolutely need to do. Climate is one of them, but it's certainly not the only one.
Prioritizing Urgent Global Issues
00:01:58
Speaker
If someone comes along and says,
00:02:02
Speaker
For the vast majority of humans, what matters is much more that their kids die from easily curable infectious diseases tonight, or that they don't have enough food, or that they get terrible education. These incredibly important issues where we for fairly little money know we can change lives amazingly.
00:02:25
Speaker
And, you know, if I was just sort of, I made no sense, you wouldn't be annoyed about me. In some sense it's because this is obvious to everyone that it's so annoying that I keep pointing this out. So I think part of the thing that really annoys people is
00:02:42
Speaker
the fact that I'm actually pretty sensible. You know, it would be much easier to just dismiss me if I was raving, you know, on one side or the other. But I'm actually saying, in a real world, we have to make hard choices. Because we... Sorry, now I'm going to sound like one of the things you just binged on. But, you know, we don't fix all problems. We don't spend money everywhere.
00:03:04
Speaker
We only have limited resources, so we need to have that conversation. Where should we spend it first? And I think people sort of recognize that maybe the next dollar that we spend on making the world better should not first be spent on fishing out plastic straws from the ocean.
00:03:23
Speaker
or to subsidize an electric vehicle. However nice those things are, but maybe they should be spent on making sure that we get a vaccine to a small kid that means that this kid will actually survive and become productive and will live up to its full potential over the next 50 or 80 years. These are the kinds of things that we actually have to take responsibility for. If we
00:03:47
Speaker
spend the money on plastic straws instead. We decide that no, we actually cared more about feeling good than doing good. I want to dig into why we are attracted to conversations around plastic straws as opposed to tuberculosis vaccines. I think that's interesting, but perhaps let's set the scene first. What are the UN Sustainable Development Goals? Why are they somewhat problematic in your view and what's your alternative approach?
00:04:16
Speaker
Yes. So it's important. And if I can just take one step further back, and the reason why we just talked about climate is that for a very long time, my basic argument has actually been we need to prioritize. We have lots of problems in the world. We can't fix it all. What should we focus on first? And it turns out that for most people in the rich world,
00:04:38
Speaker
we, you know, kind of fixed all the other things. You know, our kids don't die from easily curable infectious diseases. We have enough food. We've fixed a lot of the other problems. And so, comparatively, climate change and plastic stars, and I'm using that a little bit as a gimmick, right? But you know, the idea of the things that we worry about are the things that are left over
00:05:00
Speaker
when we fixed many of the really existential problems that we face. And so in that sense, what I try to focus on is to say, look, this is actually a global conversation. And globally, we need to then talk about, well, what should be our top priorities?
00:05:17
Speaker
And it's in that context that the sustainable development goals are really interesting because the whole world, so Australia and every other country in the world, have signed up to these goals. They are basically a way to try to say what should the world do for 15 years, starting in 2016 up to 2030.
00:05:37
Speaker
And I like the idea of saying we should start thinking about what we should do. We actually did this back in the year 2000 when we did the so-called Millennium Development Goals. You may have heard of them if you've read the book. You have. But most people have sort of vaguely heard of them to the extent that we actually promised some really smart, short things. We wanted to get people out of poverty, out of hunger. We wanted to stop kids from dying, moms from dying, get everybody in school, and fix clean drinking water and sanitation.
00:06:06
Speaker
That was pretty much it. I basically just summed up almost everything we promised back in 2000. And these were basically really smart things. Now, they're not. The only smart things are probably not. Some of them were the smartest things, but they were pretty smart things. And they energized everyone. We ended up spending lots more money, especially on these things. And one, I think, correctly, really, really sort of celebrated outcome was the fact
00:06:35
Speaker
that in 1990, every year, about 12 million kids under five died each year. So clearly unnecessary deaths.
00:06:44
Speaker
12 million kids. Just imagine that. That's just unfathomable. And over that period, so by 2015, when we'd finally lived up to, or somewhat lived up to our promises for the Millennium Development Goals, only, and there's inverted commas around that, only six million kids died each year. And there's about the same number of kids. So we really saw a dramatic reduction
00:07:08
Speaker
in child mortality. That was fantastic, and a significant part of this was because we'd set these millennium development goals. We'd actually promised that kids were going to die less. We promised even more. We'd almost promised that we would end it, but we didn't. But it was down to six. That's fantastic. Six million kids live, and a part of them, not all of them, because we got richer, and so you would have assumed that some of this would have dropped. But
00:07:33
Speaker
More kids survive because we made those decisions. That's fantastic We should rejoice and we should be very thankful for the UN then say oh wow this went really well They've said a lot of targets over the years they have every year they have lots of you know You wouldn't believe it sort of silly and wonderful targets like this. It's the year of astronomy and it's the year of eating kale or whatever
00:07:58
Speaker
pretty much all of this would be true in some year. And so from 2016 to 2030, they said, let's do another one of those millennium development goals.
Critique of UN's SDGs
00:08:08
Speaker
And so they put them together. And the problem with the MDGs was that they had been made by basically Kofi Annan, the Secretary General back then, and a few guys in a back room in the UN. They were literally all guys, and they were just in a back room.
00:08:21
Speaker
That's not quite the way it should feel if you actually do targets for the world. So this time they said, well, we want to engage everyone. I get that point. So at one point we had more than, I believe, 4,000 ideas in there. But at the end of the outcome, we ended up promising so many things. There's 169 targets.
00:08:44
Speaker
The economist, slightly tongue-in-cheek, called him the 169 Commandments. There's a reason why you have 10 commandments and not 169. Saying that 169 things are important, and remember if you read in each of these, there's tons of other things below. Saying that everything is important.
00:09:04
Speaker
is like saying nothing is important. And that was basically what we ended up doing. So we've said everything is important. We're going to fix hunger and poverty. We're going to get everybody in school. We're going to fix corruption and war and climate change and inequality and going to get organic apples and community gardens to everyone, everything good that you could possibly imagine. And it's all very nice. But again, saying everything is important.
00:09:31
Speaker
leaves nothing prioritized. And so this year, the world is at halftime for the SDGs. Between 2016, 2030, we're, you know, halftime in 2023, but we're nowhere near halfway. And this is the amazing opportunity then to tell the whole world, look, we made all these promises, we're going to fail spectacularly, even the UN says so.
00:09:56
Speaker
Maybe it's time to change track instead of promising everything to everyone, which sounds nice, but actually delivers almost nothing. Let's start about talking. Where can we do most good first? And that's really the conversation that I've been trying to do the last 20 years. So I'm excited that we basically have been able to say, all right, here are all the SDGs. What are the smartest things you can do? That is where can you spend a dollar?
00:10:22
Speaker
and do amazing good for the world compared to where can you spend a dollar and just do a little bit of good. And I'm an old fashioned guy. I think we should do the big bang for the buck first.
00:10:35
Speaker
So ruthless prioritisation is the name of the game. And in order to do that, you need to be able to run an effective cost benefit analysis to work out what are those big bang initiatives.
Failures in Government Prioritization
00:10:46
Speaker
I hadn't fully considered just how woefully bad governments are in dealing with cost benefit analysis, actually until COVID made it quite painfully obvious. And if I use that as an example,
00:11:00
Speaker
Indirect consequences of many COVID policies like lockdowns or school closures were almost totally ignored and very blunt measures like daily case rates, for example, were used almost exclusively to justify decision making. Why do you think most governments are so poor at weighing up costs and benefits?
00:11:19
Speaker
I think there's a number of reasons. So very often there's just one statistic that's much, much more sort of in your face. And so very clearly when COVID was here, a lot of people really just cared about COVID. And it's absolutely correct that if the only thing you care about is COVID, you should shut down the whole, you know,
00:11:41
Speaker
world, and then very few people get COVID. That was basically what China did. Now, it has a lot of other negative impacts, as you just mentioned, but if you only focus on this one indicator, and this, of course, is what happens when you just focus on one thing, just like when we talk about the only thing that matters is the temperature in 2100.
00:12:02
Speaker
Yes, then your only goal is to cut carbon emissions in really quickly. But for most people, this is just not true. We actually care for COVID. We care about the fact that if you lock down too much and too heavily, it actually means more people get discontent. They get mental health problems. They don't get checked for other things. And of course, the biggest issue is that when you lock kids out of school, they don't learn anything or they learn very, very little.
00:12:30
Speaker
And so that has a huge cost. Now, this does not mean that you shouldn't both consider the fact that there are benefits to locking down and disbenefits, but you should consider both. Just like when we talk about climate policy, there's benefits to climate policy, which is you actually reduce future temperature rises, which will be mostly good for the world.
00:12:51
Speaker
But it also has cost because you have to use more expensive energy. Otherwise, you'd already have switched. So the fundamental point here is there are cost and benefits to pretty much all policies when we talk about normal things. And so let me just give you a good example of normal things. It's the kind of thing where you discuss, should we put in a center divider on a road?
00:13:13
Speaker
It turns out that that's actually a good thing because it avoids people inadvertently sort of going into the other lane and getting full head-on crashes, which typically kill a lot of people. So it's unfortunately, it's also costly to put in these center lane dividers. So you will put them in roads where there are lots of traffic and lots of accidents.
00:13:37
Speaker
But you won't put in on the road that runs from Adelaide to, what is it, Darwin, right? No, no, that's not the first place you do. So the idea here is to say you do a cost-benefit analysis. And almost everywhere in the world, traffic departments do this all the time. They make these decisions of saying, what kind of safety measures do we put up if it's cheap and if it works for a lot of people? It's a great idea. If it's incredibly expensive and works for almost
00:14:07
Speaker
Nobody, it's a bad idea. And then there's a cutoff somewhere in between. This is how you do normal cost benefit analysis. And of course, what we're simply suggesting is, well, maybe we should do this for all the other stuff. There's a reason again why you don't want this. So I remember very clearly I had a debate with then Danish finance minister.
00:14:28
Speaker
on climate policy. And I'd shown what the guy who later went on to win the only Nobel Prize in climate economics, what he'd shown was the right way to prioritize climate policy. And she was very flustered when we had that debate. But afterwards, she came up to me and said, you can't just do that. You can't just show us all the costs and all the benefits, because what are our politicians supposed to do? That makes it impossible for us to argue otherwise. And I was like, yeah, that's kind of the point, right?
00:14:58
Speaker
It's not, it's fine. Policymakers can say, look, I actually care about something else. I care about equity, or I care about people living in the far future rather than now, or I care about poor people rather than rich. You can come up with all these issues, but you kind of have to justify why it is you would want to do something.
00:15:18
Speaker
that the cost-benefit analysis shows cost a lot and delivers a little benefit. And that's fine, but we simply become better at making decisions. So the way we sort of envision this is we're really just saying, look, society gets this big menu of things that we can do, all these great things we can do. But somehow it's a little bit like going into a restaurant and getting a big menu, but there's no prices and no sizes on there.
00:15:45
Speaker
You have no idea what you're ordering. You have no idea what size of food are you going to eat. Is this going to feed your whole party or just a tiny, tiny pizza? And is this going to cost a dollar or a thousand dollars? It'd be kind of nice to know. And there it's important. We're the kind of guys that go on and say, look, oh, we've looked at all the things. And it turns out that spinach is not only really cheap, but it's really good for you.
00:16:09
Speaker
But you may not like spinach. You may think it's the worst vegetable in the world, and that's fine. Then you can say, well, actually, I'm not going to buy that. We're not saying you have to do this, but we're telling you, here are the costs, here are the benefits, here are the prices, here are the sizes. Now, society has a much better opportunity to know what it is they're buying on the social menu, if you will.
00:16:33
Speaker
That makes a lot of sense when we're speaking to governments, but I'm interested in kind of the trade-off denialism that a lot of the time the public has.
00:16:41
Speaker
If we go to a restaurant and we order a pizza, generally we're comfortable enough that we can't order the pasta and the steak as well. We accept that when we go to dinner. For some reason, the public too often expects governments to do everything. As a result of that, governments say yes to everything. So I guess I understand how, how we can try and change government behaviors, but I don't think that changes until almost people are more comfortable with the idea of trade-offs.
00:17:10
Speaker
Is there any way we can actually shape the behavior and the thought processes of voters as well as governments? So I don't think voters are that incompetent, if you will. It's more that, you know, look, I want this, this and this. I know that there's lots of other people out there who want other things, but I want you to tell me you are going to get me these three things.
00:17:31
Speaker
And a smart politician sort of says, sure, you'll get all three. And actually, I'm also going to promise everyone else all of those things that they want. And we're kind of smart enough to know that that's what's going on. But I think what we try to do is simply to say, here are some things
00:17:50
Speaker
that cost little and do fantastic good. Here's some other things that cost a lot and only do a little good. How about we start with the first ones first? And I think most people sort of get that. But remember, if I'm actually listening to the government and I want a playground for my kid,
00:18:10
Speaker
I don't actually care all that much about the fact that this guy Bjorn told me that the very best thing to do is immunization for small kids in Africa or something. Yeah, sure. But I actually want the playground.
00:18:25
Speaker
But I sort of intellectually get this too. So I think what we're really doing is we're, if you will, giving tailwind to good ideas. We're making it a little more likely that politicians will make a little more of the promises to really smart stuff. But fundamentally, we'll still be doing a lot of dumb stuff, but slightly less. So our own internal success criteria is more
00:18:49
Speaker
I would love everyone to be rational in making all the right decisions, but our goal is really just to make it slightly less wrong. Okay. Well, let's get into what some of those good measures would look like.
Tuberculosis: A Persistent Killer
00:19:03
Speaker
We'll start with where the book starts, which is tuberculosis. Now, I think it's a really powerful place to start because it's a challenge that most people in the West are blissfully ignorant of. You know, I'll put my hand up and say that I thought it was yesterday's disease.
00:19:19
Speaker
I was gobsmacked to see that it is still the leading infectious disease killer in the world with around 1.4 million deaths, which is a tragedy given the fact that we know how to vaccinate against it and know how to treat it. Why haven't we solved this problem yet? Yes. That's a great example. So first of all, let's just remember you can vaccinate, but it doesn't work very well. So it's not the only or main solution. So the real issue here is if you think back in the 1800s,
00:19:48
Speaker
A lot of the people that you know really well, obviously Satine from Moulin Rouge. I'm giving away the ending of the movie, by the way, but I think most people have seen it by now.
00:20:00
Speaker
She has TB and she dies from it, right? So a lot of people, a tsunami of death hit the rich Western world. About a quarter of everyone who died in the Western world in the 1800s died from TB. We estimate in total over the last 200 years about a billion people have died from TB. It's probably the leading killer. And it was all in our minds in the 1800s. And then we got antibiotics.
00:20:30
Speaker
And, you know, so all the people who went to Sanatoria and all the people who just died with no opportunity for cure basically got cured. We fixed this in the rich world. But unfortunately, that didn't happen in the poor world. And that's exactly as you say, we still stuck with 1.4 million people dying each year. One of the reasons why we don't care all that much is because it's not rich people that die, but also it's not rich people in poorer countries.
00:20:57
Speaker
it's the marginalized people. So it'll very often be the migrant populations, the slum neighborhoods, prison populations, the mining areas, those kinds of places where people will die from it. And so there's probably less political pressure to do something about it. One of the ways I always try to emphasize, well, it's actually those kids that will be coughing on your kids.
00:21:23
Speaker
and give them TP as well. But yes, it is mostly a disease for poor people in poor countries. And once more, it's a very stigmatized disease. So one terrible statistic from Kenya shows that if you get TP and get diagnosed with TP, about a quarter of everyone will actually get divorced during that disease.
00:21:47
Speaker
because your wife or your husband won't be with you. Oh, I don't want to be with someone who has TB. People don't want to hire you. People don't want to keep you on for jobs. It is unreasonable, but that's how it is. And so everybody kind of
00:22:02
Speaker
walks around and pretends it not there. They kind of hope they don't have it. Very often the doctors will, especially if you go to a private provider, will actually play along and say, oh look, that's probably not very much. Here, take some VIX and you're fine kind of thing, which of course is what ends up killing you to a very large extent. But that's the kind of thing that we have to get across. And
00:22:24
Speaker
then once you're cured, unlike for instance with the HIV, which you have for the rest of your life, you can get cured from TB. And so what happens mostly is once you've been cured from TB, you're still like, I never had it. So you're sort of back to the silent majority that don't have TB and we're not gonna worry about it. So the reality is we need to be upfront about this because it's the only way we're gonna fix it. This is a severe problem.
00:22:52
Speaker
but it's something we know how to fix. Now, it's really hard to fix it because you actually need to take your medication for four to six months. If you've ever had to take, you know, two-week antibiotics, of course, you know how, once you get well, it's kind of hard to keep remembering. A lot of people forget it towards the tail end, but imagine having to do it four to six months. What happens is a lot of people stop taking,
00:23:16
Speaker
And then, of course, you make it more likely that you get multidrug-resistant TB. Also, you need to test a lot of people who will typically not get tested. So in Bangladesh, for instance, they have old women, typically widows, that have a responsibility. It's not their only responsibility, but they'll go around to say, you know, 10 families and they'll say, so how are everyone?
00:23:37
Speaker
And then, you know, has anyone been coughing lately? And if they keep coughing, then they sort of coax them over to get tested. Because there's a lot of people who don't want to get tested, but should get tested. That kind of thing. Now, this is not cost-free, so we actually estimate the total cost of doing all of this.
00:23:56
Speaker
very widely. So remember, a lot of this is in India, but it's also in Nigeria and many other places. If we do all of this, so get better testing and make sure that people stay on their medications. That could be sort of tuberculosis anonymous, but it's also that you sort of get juice packets to people for premium. Oh, I've been doing my medication for a whole week. All that kind of stuff. You have apps, that kind of thing. There are lots of different ways.
00:24:22
Speaker
And again, it feels a little weird to have to subsidize people to take their medication. But remember, if they don't, they're going to, over the next year, infect another 10 to 15 people. So this is how you stop it, right? This is how you actually get it. It's going to cost $6.2 billion per year, but it'll save about 600,000 people over
00:24:44
Speaker
this decade and it'll save about a million people each and every year. So that's why we find this is an incredibly good investment. You spend some money, not nothing, but it's certainly more than what you and I can sort of come up with, but it's couch change in the international system. And for that,
00:25:02
Speaker
you will help avoid about a million deaths each and every year. The total benefit cost ratio we find is, for every dollar spent, that you do $46 of social good. That's a fantastic return. But it's not many times you get that chance, but here is one of them.
00:25:19
Speaker
There's a separate, but related question here, which is how do we take a more utilitarian approach to allocating resources with respect to different diseases? So for example, in Australia, breast cancer has a very strong brand for, for want of a better term. And that color pink that represents breast cancer research is on everything from water bottles to our test cricket coverage. Now something like bowel cancer.
00:25:45
Speaker
kills more people, but it is less prominent in the public consciousness. Now, I'm not saying it's not a very good thing that we don't try and find funds and treat breast cancer research, of course, but how do we address this cognitive bias which so often shows up
00:26:03
Speaker
particularly around charity and around allocating money to particular causes. So I don't think there's a good obvious way to do this because as you just sort of pointed out some things are just much more prominent and my sort of short
00:26:19
Speaker
cut way of pointing out is we mostly care about causes that have lots of crying babies or lots of cute animals or groups with great PR. And surely that's not the right way to prioritize because what about all the ugly animals? What about all the stories that you don't hear about or the causes like tuberculosis that don't have great PR?
00:26:43
Speaker
Surely, they should, in principle, count for just as much. Now, actually, most doctors look at this really, really carefully. So they try to make these sorts of analyses. For instance, the whole conversation when you talk about breast cancer, there's a huge discussion, and there has been a huge discussion about, should you do mammography? Is that the word? Sorry, I know it in writing, and I know how to say it.
00:27:08
Speaker
whether you should do this from 50 or from 60. And so one of the things is if you screen from 50, you will find more. But one of the things they found was it also cost a lot of resources. So you have to have a lot of women come in. You also get a lot of false positives. So you will see some things that look like malignant lump, but it turns out to be benign. But the outcome of that is that you end up scaring a lot of women
00:27:36
Speaker
you know pretty badly for say a month or so before they find out oh wait you're not going to die kind of thing. And so you're spending lots of resources and you actually find lots of false positives and only a moderate amount of real positives. So what they found is that it's probably not a good use of resources to get women in by 50. Now I don't know what it is in
00:28:02
Speaker
Australia, but maybe 55 or 60. You actually make those sorts of decisions. And this is not something we have a public conversation about. This is something that technocratic people, typically doctors, will sit down and look at and say, look, we have limited resources. How should we deal with bowel cancer and with breast cancer and all this other stuff?
00:28:21
Speaker
and deal with it in such a way that we make sure that our money go to save the most people. That's, of course, what we want people to do, so it's not driven by what has the prettiest color of ribbon, but actually what saves the most lives. And in that way, of course, we should have the same approach to dealing with all the big problems in the world. And one of the things that we try to do then with the best things first is simply to say,
00:28:46
Speaker
Look, of all these things that we can do, it turns out that if we focus our money on tuberculosis, it's vastly overlooked. So in that sense, we're sort of all of the things that we found are slightly sort of these underdogs, these kind of, oh, I never heard about that, but it's incredibly important.
00:29:03
Speaker
sort of stories all the ones that don't have the pretty pink ribbon or you know a lot of the PR attention that say climate change and many other things have these are the things that are the underdogs but where we can do an amazing amount of good
00:29:18
Speaker
Well, one which may be a slight exception to that is education, which of course is something which is very well known to be important. In your book, it is the biggest investment area. It's also the area with the biggest payoff, I
Effective Investment in Education
00:29:29
Speaker
believe. I was fascinated by this chapter because it feels like the developing world and the developing world and the developed world, I should say, fall into the same trap.
00:29:38
Speaker
in that they basically just say, throw more money at it, open more schools, hire more teachers, pay more teachers more money, try and lower the student to teacher ratio where possible. A somewhat leading question, is there a better way? Yes, there is. And so you're absolutely right. I should have said, either we look at boring problems, you know, things you don't hear very much about,
00:30:01
Speaker
or solutions you don't hear very much about because the sort of standard approach to many things is throw more money at it. And not surprisingly, when you have a lot of interest groups, they will typically say, spend more money on us. So one of the sort of standard arguments in education is more money for teachers, that is higher salaries and lower class sizes, so more teachers per student or fewer students per teacher.
00:30:29
Speaker
And it's not that these things are not good in and of themselves. They're probably such that if you have better paid teachers, you will, in the long term, get more quality education. And if you have fewer students in each class, you will probably get better education, but only slightly so.
00:30:49
Speaker
And so it turns out to be a fairly ineffective way to improve education. One of the big problems in the poor part of the world is that we got everybody into school. That was actually one of the Millennium Development Goals. It was to get all kids into school. It seemed like an obvious first thing, you know, instead of having kids just work in coal mines kind of thing, which is not.
00:31:09
Speaker
really what they were doing, but, you know, get them in school and get them in front of a teacher and learn something. But unfortunately, they learn terribly little. So they're technically literate, but they don't actually know how to string words together to read a full sentence. So there's this one example sentence that they give to 10 year olds across the world. There's a lot of them. I'm just going to give you one example, right? But they they ask them to read the following sentence. Vijay has a red hat, blue shirt,
00:31:39
Speaker
and yellow shoes. What color is the hat? I hope it's red. Yes. You passed. Unfortunately, 80% can't answer this question. They can read the VJ, they can read the has and red and hat, but it just doesn't string together into sentence. And so literally, that obviously means they can't do very much with their education.
00:32:08
Speaker
And when I told this to Russell Brand, he actually said, well, the most important part is VJ has really bad fashion sense. But the point, of course, here is to say that we really need to get better education to these kids. The big problem in most developing countries, but it's also, as you mentioned, a problem in richer countries, but
00:32:29
Speaker
probably less so, is that we put all the 12-year-olds in the same grade and all the 13-year-olds in the grade above and so on.
00:32:37
Speaker
But in reality, these kids, and this is especially true in poorer countries, are vastly different levels. So, you know, some kids have no clue what's going on and are basically ready to give up. Some kids are incredibly bored and maybe ready to give up or certainly not paying attention. And maybe if you have 50 of those kids in your class, what's a teacher going to do? There is no way
00:33:02
Speaker
this teacher can teach each one of their kids at his or her own level. Yet that's what we ideally should be looking for. Now, many people will then say, well, pay teachers more, lower the class sizes. Indonesia did this spectacularly back in the early 2000s. They actually doubled spending on schooling, so they hired about a million more teachers.
00:33:27
Speaker
Double the pay for each teacher and because of the way it was done so it happened different districts at different times You can actually do a randomized control trial and they did that it's one of the most famous papers in the educational economics
00:33:39
Speaker
And it's called, very tellingly, double for nothing. So what they found was you spent twice as much money and there was no impact, not just a little, but no impact on learning. Now, there was an impact and teachers happiness. They were much happier because they got paid twice as much, which is nice, but presumably not the main outcome of educational policy. So the reality here is this is not the way you should do it. How can you do it? Well, it turns out that there's a number of ways. And I'm just going to tell you one of them, which is
00:34:07
Speaker
teach at the right level. This is one of the best ways so that you teach each kid at his or her own level. The teacher can't do that, but technology can. So imagine putting these kits in front of a tablet one hour a day.
00:34:22
Speaker
Not a whole school day, just one hour a day. This tablet has educational software. It'll very quickly find out, oh, you know, VJ is at this level. And I will teach him at that exact level. And, you know, Sanjo's at that level. And I'll teach her at that level.
00:34:38
Speaker
then suddenly you start learning a lot more. This tablet will have a cost. We estimate the total cost, you know, assuming that some of those will be lost in corruption, some of it will be stolen, some of it won't be used right and all that, you know, incompetence, the whole shipping. We're assuming with all that.
00:34:54
Speaker
It'll cost about $31 US dollars per pupil per year. But the benefit is that living through that for one year. So, you know, seven hours a day, you'll still have the same old boring school where you learn very little. Then one hour a day sit in front of this tablet. The reason why you do that is you can share the tablet with lots of other kids. When you do that,
00:35:17
Speaker
you will, by the end of that one school year, have learned what you normally would have spent three years learning. You'll simply have tripled schooling in learning. Remember, it's very, very low efficiencies, so it's not like they're suddenly all becoming rocket scientists, but they're actually becoming
00:35:33
Speaker
reasonably well educated. And we know how to do that. We have studied this across a wide range of areas. We know it works. We know it works despite that some of this is going to be lost. And so what we estimate is, yes, it'll cost $31, US dollars per kid per year. But the benefit is that these kids will grow up to be more productive.
00:35:55
Speaker
They will then have higher incomes throughout their lives, which is equivalent to the order of $20,000 over their lifetime. But of course, this is all far up into the future. So in today's dollars, it'll be about $2,000 worth.
00:36:10
Speaker
But spending $31 to deliver almost $2,000 of good is a fantastic outcome. It delivers $65 of good for every dollar spent. This is an amazing way where we, for about $10 billion in the world, could make the poor half of the world a little more than $600 billion better off each and every year. It's just a fantastic idea. These numbers are extraordinary. I think it opens the door to a quick detour into modeling, which
00:36:40
Speaker
Most people probably hadn't thought about until, again, COVID, when models came to dominate our day-to-day lives. Can you help a layperson understand how you go about a modeling process like that, where you can understand the benefits potentially sometimes far off in the future from that sort of cost outlay?
00:37:00
Speaker
Yes. So it's incredibly important to say this is much, much less complicated modeling than COVID modeling, because it's not assuming a lot of other, you know, what do you then do when other people are sick and all that stuff. We're simply assuming. There's a lot of good evidence to show if you have higher test scores, and we know there's a lot of standardized ways to show that, you have better job prospects. So you're more likely to get job, you're more likely to make a higher income. This is obvious.
00:37:29
Speaker
is because you're just more productive. So obviously, companies would be willing to pay more for you because you're actually contributing more to society. So it's a great way to sort of show this is actually, if we've taught you to understand sentences better, you're actually literate, not just technically literate, you will be a more productive person. And we know how much that will improve
00:37:51
Speaker
So the three years of schooling for one year is equivalent to about 2% increase in your income every year for the rest of your life.
00:38:02
Speaker
Now, remember, we're talking about these kids who are what, 10 years, 9 years old. So this is not going to help them for another 10 years. So we're essentially assuming that they'll go on in school, there'll be no benefit. You know, if we stop this, actually we hope you will go on, but we don't actually have good data for what happens the second, third year. Is it going to be cumulative? Is it going to be multiplicative? We don't quite know.
00:38:25
Speaker
But it's undoubtedly going to be good. The main point here is, so in 10 years, you will now start working. Now, not everybody will get a job. Some of them will just be housewives. And it is typically almost all women that don't go into the job market. And some of them won't be able to find work.
00:38:45
Speaker
We modeled that, say there's a 30% unemployment rate, so you will have 70% chance of having a job. We also know what the job wage will be at that point in time. It'll be higher because your economy has grown. And so we use a standard prediction from the OCD and the UN to estimate what will be your income.
00:39:06
Speaker
then your income would have been, say, $1,000, because you're now 2% more productive, it'll be oh my god I shouldn't have done that right, but it'll be $1,020. Right. I think that's right. Yeah, I'm not mathematician. So we have we have Excel to do this for us. Right. And so
00:39:26
Speaker
The next year, you would have had $1,020 or $1,040 because the economy's grown, you become more productive and you're older and so on, and then you'll get 2% on top of that and so on and so on. And then we take that whole increase over your lifetime, and what we then try to say is, what's that worth in today's money?
00:39:46
Speaker
And there's a whole branch of economics that have worked on that. And it's basically saying that for a variety of different reasons, we value the present higher than the future. You value $100 today much more than you value it in a year's time, partly because you don't know if you're going to get the $100 whereas I'm waving the $100 bill in front of you right now.
00:40:07
Speaker
uh you also think that if you get it now you can invest it so it'll actually be worth 105 or whatever dollars in a year's time so obviously you're not going to accept less than 105 dollars in a year's time and so on there's a lot of and most people are just impatient as well we said at this
00:40:26
Speaker
typical discount rate, which is pretty much the interest rate for society, which is 8% in poor countries. And so we basically discount all of those values. That was why I said it's about $20,000 if you just add it up.
00:40:42
Speaker
But that both adds up stuff that's near and very, very far off into the future. And then it all jump a little together. That's not really a number that means anything except that if you added it all up. But what it really means is it's worth about $2,000 today. So notice what we've said. We've not said the best possible outcome, all the money that you can add up. And your kids are also going to get richer because you're now better educated and you'll feed them better and all that kind of stuff.
00:41:10
Speaker
We're sort of taking a pretty dim and low key version of it and saying, well, all of that money just for you is going to be worth about $2,000. But even that will be a fantastic investment for society to do.
00:41:26
Speaker
That was my reflection as you were speaking is that the credibility in this process, how the faith in this process comes from being very conservative with your assumptions and in some cases almost looking at that kind of worst-case scenario. I want to turn to agricultural R&D, agriculture is obviously a very important sector in Australia.
Agricultural R&D and Free Trade Benefits
00:41:45
Speaker
In this chapter you call for more food and you call for cheaper food, which is interesting because in some respects it goes against the
00:41:52
Speaker
goes against the grain, no pun intended, of what a lot of people are talking about in Western circles. It also sums up your ethos, I think really nicely in that what you're saying is that asking people to reduce their quality of life just won't work. It won't encourage sustainable behavior change. So in this instance, you know, asking people to eat bugs or taxing certain foods or forcing people to eat synthetic meats, it won't be effective. It needs to be a technologically led solution. What does that look like in the agricultural context?
00:42:22
Speaker
So I think it's important, all of the stuff that you just talked about is a very, very Western kind of thing. We have enough food. I mean, if you look at most of our bodies, we actually probably have too much food. So I think there is some sense in that conversation, but for most people on this planet, the worry is the exact opposite, that you actually don't have enough food and you want cheaper food, but also you want to have, and this is of course what made us rich. Remember, two, 300 years ago, almost everyone also enriched
00:42:51
Speaker
Today's rich countries worked in agriculture. If everyone works in agriculture, nobody gets rich because there's nobody to make your iPhone. And so the simple point is you now have, and that's probably true in Australia, it's certainly true in most Western countries, you have a couple percent working in agriculture. And we just have to consider for a second how amazing it is that we have a few people for every hundred people.
00:43:14
Speaker
that produce all of our food. How cool is that? I don't actually have to go out until my potatoes and all that stuff because somebody else does that for me so I can sit here and talk to you over Skype or the equivalent. This is amazing. This is what makes us all incredibly productive. Unfortunately, for many countries in the developing world,
00:43:35
Speaker
Still the vast amount of people work in agriculture so about two-thirds still work in agriculture and so we need to make them much more productive so that few of them can produce much more food so that most people can move to cities and
00:43:50
Speaker
You know, not necessarily sit and make other podcasts because there's probably an over limit to that, but at least do other really, really interesting stuff. So the reality here is we need to find smarter ways to produce our food. That was what the first Green Revolution did back in the 1960s. We worried a lot about not being able to produce enough food.
00:44:10
Speaker
than Norman Borlaug, who later got the Nobel Prize for it, and a lot of other people that he got most of the credit for it, basically found a way to produce wheat, corn, rice that produces a lot more for each hectare. That's a great way. You know, if you have just this little seed that you plant, and then it's just much more effective. Now there's a lot of other things you need to irrigate it better, you need to
00:44:34
Speaker
have more pesticides and you certainly need to have more fertilizer, but mostly this was about making much more productive food. This is what made it possible for most people in the rich world to now live totally without any need to do your own potatoes.
00:44:51
Speaker
And this is what we need for the rest of the world. Remember, we did this for wheat, rice, and corn, but we didn't do it for sorghum and cassava and all these other things that most of us don't even know which are the staple foods in third world countries. If we did the same thing for them, that would make their
00:45:10
Speaker
agricultural workers much more productive that means they could produce much more so they would actually end up making more money but the price of each of these cassowas would fall in price which would be great for people living in the city because they'd have to pay less so you can get both agricultural partners of the farmers make more the consumers pay less everybody is richer and you actually because the prices drop you have fewer people starving so about a hundred million
00:45:39
Speaker
fewer people starving. This is just a win-win-win all around. We estimate that, again, this is not going to be free. We're estimating this will cost $5.5 billion, US dollars again, but it will actually create benefits. This will take a little longer, so it'll come over the next two or three decades, but on average, average over the period, it'll deliver about $184 billion in social benefits.
00:46:05
Speaker
So fundamentally for every dollar spent, you'll do $33 worth of good. Again, this is just one of those things that we should be doing, but it's not sexy as some of the other things that we're talking about, which is one of the reasons why it ended up on our list. It's just a fantastically effective way to help the future.
00:46:22
Speaker
That makes a lot of sense and I'll cut the agriculture conversation a tad short because I want to leave some time for what is potentially a more politically sensitive conversation and that's around free trade and immigration. Now, I think it's fair to say economic growth is not fashionable in some circles in the West and it's usually in the circles that have benefited a great deal from economic growth over the last 100 years.
00:46:48
Speaker
Similarly, the rise of populist movements, Trump, Brexit, and so on, have dulled the desire for free trade in some parts of the West. You're still a free trade advocate, particularly to help the world's poorest. How do we go about making that argument, particularly when there's this instinct towards economic isolationism in some corners?
00:47:10
Speaker
So here, we're definitely reaching the spinach is good for you sort of area because it's fine. If people end up disagreeing with us, we're simply pointing out here's a great opportunity to make the world richer. But I think more people are sort of going to say, yes, immunization of small kids and better food is great, but free trade and immigration I'm going to be more skeptical about.
00:47:34
Speaker
But we're simply, again, making the economic arguments here. So the point with free trade is fundamentally, and this has been known at least for 200 years, if you do what you're good at, if I do what I'm good at, and we trade, we're better off, both of us. Because you can specialize in what you do well, I can specialize in what I do well, and then we'll trade each other. It works better if we're much more than you and me, certainly if you know what I can do.
00:48:00
Speaker
But fundamentally, this will make the whole world much better. And that's, of course, what has made a very large part of the world, as you pointed out, incredibly rich. One of the things that economists have forgotten was that, oh, wait, this doesn't actually help everyone. If you work in a shipyard producing ships or if you sewed T-shirts in the rich world, free trade turned out to be really bad for you.
00:48:26
Speaker
Rust Belt phenomena, right? Yes, this is the Rust Belt. We have paid too little attention to that. And I think in some sense, because economists, and I blame myself on that as well, were just sort of too gung-ho and saying, well, on average, it's great.
00:48:42
Speaker
We'd forgotten that this was actually a real problem to some people. And so you see sort of the battle for Seattle back in 2001, where we have the first global meeting on free trade, where a lot of people are saying, well, maybe we don't want more free trade. And we have become increasingly unenamored with free trade since then. It's become almost fashionable for most people to say, we don't want.
00:49:07
Speaker
more free trade. So what we wanted to point out was, well, if you look at the models, how much better could the world be? And we take a hypothetical, if you imagine to increase global trade by 5%. You could do this in a lot of different ways. You could have a reduction in tariffs. You could have more agreements. You could also have better transportation. This is not really what we're looking at. We're simply saying, what would be
00:49:33
Speaker
the net benefits and the net cost sorry the cost and the benefits for that and so what we're looking at is not just that if we all trade with each other we on average get better off but also some people don't so we look at all the people who work in import
00:49:50
Speaker
threatened tech area. So think, you know, sewing t-shirts in rich countries, but of course the next thing won't be that. And then ask, well, how much of a risk will you have? And there's good estimates from this, mostly from the opening up of especially the US to China. And so it's very much Rust Belt studies.
00:50:09
Speaker
We now believe that these are probably slightly exaggerated, so if anything, this is slightly worse than what the next openings are. But let's just go with this. We've done the first analysis that actually tries to look at what are all the costs and what are all the benefits. So the benefits are fantastic. Fundamentally, we get much richer from 5% increase, we'll end up being about $8 trillion better off.
00:50:34
Speaker
But, and this is important, there will be significant people who will also incur a loss. They will either lose their incomes or they will see their wages go down because they now have to compete with poor countries and or they will leave the job market altogether, which is all three things we saw in the US.
00:50:53
Speaker
We've tried to make a standard economic model. It was some of the best economists in the world doing this thing. And it's the first one that actually tries to split this up on the rich and the poor world. What we find is, fundamentally, in the rich world, so this would be Australia and the US, EU, others, that comes out to saying, yes, it's going to be very good, but there's also going to be substantial cost.
00:51:18
Speaker
For every dollar that you have of cost, you will get benefits that are about seven times as large. This is not a fantastic and amazing idea. It's a pretty good idea still and it's a lot of money, but it's real cost. Now,
00:51:34
Speaker
There's obviously enough cost to help the people who are actually suffering to re-school them, to give them job support for one or many years or whatever you want to do. There's a lot of money to be redistributed here. But it's important to say these are real problems. That's, of course, why people were very concerned about it.
00:51:53
Speaker
But, and this is the untold part of the story, if you look at this from the poor part of the world, so low and low middle-income countries, it turns out that yes, there are costs, but for every $1 of costs, there's $95 of benefit. And this is why for the poor part of the world, this is just a fantastic outcome. And the fact that the rich countries are now so worried about this and saying, no, no, no, no, we don't want more free trade, of course, actually means that we're
00:52:23
Speaker
We're conferring a lot of potential losses on poor countries that could have seen their economies grow a lot, just like the Chinese economy grew. And we should take responsibility for that. I think we should say, look, this is a policy that not only amazing for poor countries, but it's pretty darn good for us. It could have been better. We need to take care of the people who are actually suffering from this. And we need to be honest about it. But even with that, we'll probably have a seven to one
00:52:49
Speaker
benefit even in rich countries. This is something that should definitely be one of the 12 things the world should do. Yeah well said. I think we could speak for for hours but we are almost at time Bjorn. I have one final question and that is
00:53:02
Speaker
And I have one, also, one point. I just want to summarize. Please, you go. Please. So Jeff, because I think it's important. We've talked about, we need to prioritize. We've talked about how we're failing. And then we've talked about some of these specific instances, like, for instance, tuberculosis or agricultural research and development and free trade. But the important point is when you step back,
00:53:25
Speaker
and then look at all of these
High-Impact Prioritization for Global Prosperity
00:53:27
Speaker
things. So not just education or not just agricultural research and development, but all of them. We find that the total cost of all of these things is 35 billion US dollars each and every year. Again, it's not something that you and I have. It's not enough even for, you know, it's not something Elon Musk could do sustainably. He could certainly do it for some years, but I doubt that he will.
00:53:47
Speaker
But it's not something that one individual can do. But again, this is a very, very small part. Every year, the world spends more than $200 billion in development aid. Just over the last couple of years, we've increased our spending on pet food more than $35 billion. We've increased it $39 billion.
00:54:06
Speaker
So yes, we can afford this. This is certainly something we could spend each and every year. $35 billion. It would save in total 4.2 million lives each and every year. This is every seventh death we could avoid in the poor half of the world. And it would make each person in the poor part of the world
00:54:26
Speaker
about one dollar richer each and every day or in total about 1.1 trillion dollars. So spend 35 billion dollars, save 4.2 million lives and make the world 1.1 trillion dollars richer. This is just simply the best deal there is and again we find that for every dollar spent
00:54:45
Speaker
you will do $52 worth of good. That's sort of the sales pitch. And again, you know, don't bother with the with the spinach bed, but you know, pick up some of these. So typical, maternal newborn health, malaria, nutrition, chronic disease, childhood immunization. The list goes on. There's a lot of smart stuff in there. You don't need to do all of it. Please, please, please. Let's do some of it.
00:55:06
Speaker
My question was going to be, what would your pitch be to a billionaire philanthropist? Great minds think alike. I know that Gina Reinhardt, who tops our rich list, is a spectator Australia subscriber. So Gina, if you're listening, get on the phone and speak to Bjorn. Bjorn, I finished the book with this profound sense that if people do pay attention to it, which I know they will, it will have a wonderfully positive impact on the world. And that's something which you can't say of a lot of books.
00:55:34
Speaker
I strongly recommend that everyone goes out and gets a copy of Best Things First. Link to that is in the show notes. Bjorn, this has been an absolute pleasure. Thank you very much for coming on, Australiana. Thank you. It was wonderful to talk. Thank you very much for listening to this episode of Australiana. If you enjoyed the show, please leave us a rating and a review. And if you really enjoyed the show, head to spectator.com.au forward slash join. Sign up for a digital subscription today and you'll get your first month absolutely free.