 We are now faced with the fact that tomorrow is today We are confronted with the fierce urgency of the now Yes in this unfolding conundrum of life and History there is such thing as being too late This is no time for apathy or complacency This is a time for vigorous and positive action. This is Rob Johnson president of the Institute for new economic thinking There's something happening here what it is ain't exactly clear Buffalo Springfield saying that in the 1960s But with what's happening in the Ukraine what's happening with climate what's happening in financial instability What's happening in social unsustainability and inequality are Raising questions among everyone about whether we have a system whether we have Which you might call the means to avoid a war Whether our children are going to be able to survive or thrive These two gentlemen Kevin Gallagher he's from the Boston University runs a global development policy center and Richard goes a right Who has been a guest on this podcast before he's the director of the United Nations conference on trading developments globalization and development strategies? they've written a book That is how I say The time is ripe for us to read and explore the vision that I've had the privilege of Exploring here in the last couple of days since I've seen the book the case for a new Bretton Woods polity press puts it out and It's clearly as we approach the world banks and IMF meetings and so forth It's a challenge that I really admire that you gentlemen have put together to go To the table and using the analogy of Bretton Woods Meaning another time coming out of dysfunction when something coherent was created. So thank you both for joining me today and Let me start with you Kevin What inspired you guys? I mean I'm talking about all the craziness going on But what inspired you guys to do this and to think you can make a difference? Well, it's great to be on this show with you Rob We in 2018 and 2019 were very concerned about the about the modest at best response of the global system and responding to the 2008-2009 financial crisis and heading into 2018 and 2019. There was a massive rise of right wing Populism rising inequality around the world and a lack of real action on climate change and so With umtad the Global Development Policy Center put together a bunch of focus groups with civil society heads Union representatives policy makers and so forth and we said we need to repivot these institutions for the 21st century like we did in 1944 during Bretton Woods and we need to put together a set of guiding principles that would do that and Richard and I released a short pamphlet in 2019 and then in the midst of the COVID crisis where we saw once again not learning the lessons of 2008 and 2009 we saw how the multilateral system failed to vaccinate the world failed to deal with the liquidity issues and failed to deal with the financial instability that came around From the COVID crisis that we just buried ourselves In our offices for a few weeks and and banged out this larger book to spell out a larger case For a Bretton Woods moment. We don't want to go back to Bretton Woods These aren't we're not going to be issuing new MAGA hats around here What was amazing especially for this time and we didn't anticipate the war is that The conversation about the need for a set of principles that would guide global economic governance for a century started in say 1933 and culminated in 1944 in the midst of massive Populism in the midst of massive inequality and in the midst of an actual war is when they actually forge these things That era did not let a good crises go to waste They put together a set of principles and a set of institutions that work relatively well Until say the early 1980s and this book calls for that kind of a moment We're calling for a global discussion to realign Global economic institutions for our collective climate social and development goals Richard, uh, I must say right at the outset I am so glad that my young scholars initiative has a summer school. That's an affiliate with um, tad And this is this is grist for the mill this coming time I mean, this is really exciting to me to see you stepping up like this together but Richard I think we will pick up these issues rob in the summer school In august this year very much. We want to focus on these issues. I mean, I would just add to what kevin has said, um, you know untat in a way has been on The front line of these issues for you know, since the beginning When back in the 1960s when we were disgruntled or dissatisfied To some extent with the way in which the development issue had been handled by the Bretton Woods institutions. I mean, you know coming out of the increased political independence of developing countries They didn't think the rules of the game that had been hatched in the in the 1940s really touched on many of their Concerns particularly when it came to access to Long-term stable affordable finance. So so, you know untat has been at this trying to reform those rules for some time But it was very much in the in the 60s and 70s a reformist agenda I I think you know, there was a massive shift as you know in the in the rules of the game from the late 1970s Early 1980s and call it what you like neoliberalism hyperglobalization, you know, there's a big debates I know about how you actually describe that that shift, but it was a fundamental shift Away in many respects from from what had actually been established in In in Bretton Woods the the need for a multilateral system not to override Governments not to reduce their policy space but To support governments in their endeavors for a more inclusive and sustainable Growth and development path. I mean, it was it was heavily dictated by the needs and interests of advanced economies But that was the intent of multilateralism, you know this despite the kind of conventional histories that you hear about the kind of 75 year old You know rules based international order. That's not really the story of the post-war era There was a real radical rethinking and shift in the late 70s early 80s in a way that we found To be much more inhospitable to the to the need and interests of developing countries Then then was true of the original model And so, you know, we've been we moved interestingly in downtown from being Essentially reformers of the system, right that we thought this was the system that was a good system in principle As we try and articulate in the book too But it needed needed change, but it didn't need radical overhaul To to a system that was because you know because the need for developing countries To have their own development path in a way was accommodated within the old Bretton Woods system By the by the time we got into the late 70s early 80s the system had shifted from that idea of Of a multilateralism that was there to support a kind of progressive state Agenda to essentially being enable as of this new highly financialized world And that was a world that we saw as being particularly hostile to what developing countries need to to To progress and so we've been kind of very critical of this Bretton Woods 2.0 Whatever you like to call it for the last 30 or 40 years and it's a big issues that we'll talk about in there I think that that we try and Articulate in the book of which perhaps the biggest and it's become even more Significant, I think in in over the last decade Is of course the question of public debt Sovereign debt the whole pressures the developing countries now face because of the burden of debt that's on them, which we don't think Essentially means that they can't deliver the kind of sustainable development goals that the international community has has Committed itself to and without fundamental change I mean, we're not we're not arguing for a complete new system But without some fundamental changes in that system It will be very difficult to meet the climate crisis to meet the growing problems around inequality that kevin Talked about and now to meet the problem of the geopolitical problems that have emerged as a consequence of the war itself In my experience in running a podcast. I get frequent comments About climate change. Why do we all talk about it and do nothing? And my sense is the specter And the danger related to climate deterioration and the fierce Accidents and things that happen vis-a-vis the weather and flooding and coastal cities is Is really haunting people and and the IPCC just put out a report that essentially said we better get on the horse because It's time to ride. It's not time to talk about it What's getting in the way? I mean obviously each national government can't take care of the system unto itself And if one starts to do things and puts its society through transformation, but the others don't join They can become despondent because Things will continue to deteriorate unless we all cooperate, but Either of you just what do you see? That's going to kickstart us what might call out of fantasy and fear world and into action With another climate That's another reason why we wrote this book. There's some incredible Points of light that you can point to all over the world of Incredible action on climate change, but like you said a stable climate is a global public good And you know, charles kindleberger wrote the classic book on the on the public goods that need to be provided and by global institutions But obviously when kindleberger was talking Uh, he there was no thought about climate change. We did the problem wasn't wasn't even there And so uh, just like famines, you know, martia sen wrote great work Many years ago about how there's famines all around the world, but there's no lack of food There is a need for an incredible stepwise mobilization of finance To be able to transform the world economy south and north Towards a low carbon and more socially inclusive economy But it's not that like the finance isn't there though the number one tenet of our Of our book is that global finance needs to be oriented towards our social and environmental goals and In the 1940s when we created these institutions The the core thing everyone was concerned about in those days was hey full employment and policy autonomy to be able to manage that The 21st century that is still full and core decent jobs have to be at the center Uh, but so does a stable climate and that can only be done at a at a global level One of the statistics that uh, we think to really screen out of this book is that if you look at in in the year 1980 Uh, the world economy has increased by a factor of about seven and the trade has increased by a factor of about 10 But finance, uh, which is now in in trillions of dollars of global assets and liability is 25 to 35 times larger than it was in 1980 But gross fixed capital formation what nerds like us call It's just basic investment has not changed And as a matter of fact in developing countries It's gone down if you take uh, if you take china out of the equation That is the one country that has really been uh investing in in a future And most recently over the past decade really putting together the kind of industrial policies to Focus on wind and solar But like you said the world has to do this and this is why we call for a global solution And global institutions to make this robust with all due respect I I I wrote this book with a great friend from the united nations And I think the united nations treaties, uh, the paris climate agreement and so forth are super important Treaties in and of themselves But they have been Satellited by these core international economic institutions And one of the things especially on climate change that we're saying in this book Is that we cannot pretend that this paris agreement is going off Going on on some other part of the planet that it has to be mainstreamed and wired in to our global Economic institutions, whether it be the g20 the imf the world bank And the world's network of central banks that provide so much liquidity, uh, and so much financial direction around the world You know, uh When we when we talk about whether it's climate or the pandemic I can envision that future textbooks Can not make externalities and public goods chapters 37 and 38 It's on center stage right now And I believe that from reading your book the map that you're creating is acknowledging The power and the importance of this collaborative public goods and I enjoyed kevin when you were talking about the difference between finance Which is in some levels extracting From the system from real capital, which is building The system and when you're extracting more vigorously while Not enlarging the pie Then the questions of social sustainability also come roaring on to the stage and uh, that balance particularly between north and south seems to me to be, uh essential at this time and I believe in the global south some of the difficulties that others like richard when you and I did a thing with Patrick bond in a panel talking about How to what you might call Get capital into the emerging world when people are afraid of corruption meaning Private capital flows are afraid to go there. They charge an enormous risk premium But we need the capital to go to the equatorial regions so that solar panels can Provide a renewable source of non-carbon energy. There's so many dimensions here But let let let's zoom around again a little bit richard. Where where do you see this in relation to the pandemic? What we're surely we're surely learning that when we don't vaccinate everyone And a handful of people Like they say the 10 richest people doubled their net worth Through the crisis and had we taxed them and given everyone a vaccination We probably would have saved trillions of dollars in macroeconomic Assistance that was induced by the crisis and the duration of that crisis How do how where's the pandemic teaching us? About the structural reforms that need to be made Yeah, I I mean there are a couple of things and that I would add it and to what kevin said too, Rob But can you you know clearly come out of the of the last few years? One is you know, there has been and I think this is very much linked to the the whole financialization trend there has been this kind of Short-termist mindset has become kind of Hardwired into decision-making not just in in economic decision-making, but political decision-making too and and and and that that What we're talking about are you know long-term Challenges that that essentially require planning and industrial power things that have not have not being consistent or conducive to the kind of narrative that has emerged Over the course of the last two or three decades. So that kind of short-termist kind of mindset is is is a huge challenge and of course that's linked to And I think this is gets back to the question that you raised about why we're not Really seeing the changes, you know, it's interests form around these You know the kind of behaviors that you've talked about these short-termist predatory type behaviors that That are not conducive to the kind of investment strategies that we we need to See to deliver on these global public goods and and that was true That's been true of the of the pan of the pandemic, right? I mean it was the the the speed at which the scientific community Collectively came up with a solution through the vaccine has has contrasted sharply with the With what you would just mention this huge asymmetry in the distribution of the vaccine between the north and the south and not only that the resistance of the advanced economies Particularly to waive intellectual property to allow developing countries to begin The process of actually being able to make the vaccines themselves, right? And and and quite clearly the power of pharmaceutical interest groups You know is is is Central to that in which intellectual property has itself itself become a source of of rents and rent seeking behavior, you know I mean as you know all the all the evidence suggests that the kind of intellectual property regime that we have in place now Has far less to do with with stimulating innovative behavior than he then it does with with kind of creating quick rents that The boost profits through extracting value from from elsewhere in the system And so and and you know for us in in in Geneva and the wto That resistance to waiving the TRIPS legislation. I think has been a kind of has been symbolic of Of a kind of you know, what I would call a kind of neo mercantilist type of behavior That has become endemic in behind a veil of multilateralism It's it's these very powerful interest groups that have become very influential in shaping the international agenda Which which seems to be inimical with the kinds of challenges that that we're talking about here Which which require this kind of longer term? collective planning oriented kind of Initiatives if we're going to if we're going to meet them. So I you know that that is a particularly worrying I mean we can take positives I think from the from the way in which the scientific community did respond in this remarkable way to To the to the pandemic, but as we get into the political economy of it that has if if if anything It may well have become worse as a consequence of the panic of the pandemic And certainly as we come out of the pandemic and what we're seeing now and what we're experiencing with the with the with the Policy shifts that that are taking place in the advanced economies The tightening of monetary policy, etc is taking place without any thought for what the consequences of that might be for developing countries that were struggling before the pandemic and now face an increasingly hostile International environment that that that is going to has already begun to tip some of these countries into social and political conflict conflict We've seen that in countries like Sri Lanka and and unless something is done seriously about these issues and quickly Well, we'll become a a much more prevalent feature of the geopolitical landscape and that's got to be a worry for everybody Yeah, I'll I'll use an analogy from my own life experience. I grew up in Detroit, Michigan When Detroit declared bankruptcy People said what do you mean bankruptcy? You can tax people and I was working there as an advisor to people who were trying to resolve what was happening And I said You can raise taxes on the body politic so you don't have to Reduce the pension and the health care For women who worked for 45 years in municipal government and earned those rights And by the way, they're not eligible for social security or Medicare because they were covered by this other system and Everybody said well, what do you do? I said what a company declares bankruptcy when it doesn't have revenue All you guys have to do is raise the taxes And a gentleman happened to be in the republican party from the state legislature said I need to talk to you and he said you're right. We could raise taxes and as soon as we did Someone would run in a primary against me well funded by people Because they threaten To move their capital out anytime you do anything and we think that would devastate the base But more important than that. I'll lose my job if I back supporting these people. So you have these ladies 45 years of work Not being rewarded because capital has nanosecond escape possibilities And politicians are afraid of them. I'm speaking about a particular institutional episode But that's kind of what you might call the generic tension In the era of globalization where nation state control is deteriorated And capital and technology being so mobile have so much relative power compared to people Kevin you have thoughts regarding the How would I say There's that saying which all we're all in this together But as I was listening to richard Sometimes were not Because they create an otherness and rally around What we might call the nation state Or the community or a subset of the community to protect them But not dealing With some of these things like disease Can come flowing right back on top of us and being tribal Is what you might call contributing to the cumulative damage that not only others will feel but will feel Well, we we throughout the book we we really see three inherent things that are Sort of fundamentally characteristic of the world economy right now and and like you said They can't be in chapters 37 and 38 of economics textbooks Right because what you just said about pandemics if you don't deal with it anywhere It's going to hurt people everywhere. It's the same thing about climate change We don't deal with climate change globally more droughts and more fires in california It's more taxing on on the public budget here in the united states and it wipes out the entire capital stock in Countries like uh, barbedos, etc. And causes fundamental financial instability there So climate and pandemics You know, we really see this book as uh as acknowledging the fact that the world economy is now inherently financially unstable economically unequal and Environmentally unstable and all of these things are global public goods when there's Financial instability anywhere. We see it over and over again with the financial crises that keep racking us. It is everywhere if uh Inequality is is creating increased polarization rising of right wing populism And obviously climate and pandemics are also just globally Costing so much So what you know in terms of this book is really about starting a global conversation about putting these things at the center And what I think is different about the 21st century now Because as richard has said and we say throughout the book and obviously, you know A lot of these problems has started in the late 1970s and early 1980s, but what is so Uh, so characteristic of the 20th first century now is that they're they're all right on our front radar screen And the constituents unfortunately of the people who have been hurt are all over the planet It's not just poor farmers in mexico that we're going to get hurt by the north american free trade agreement Uh, now it's the folks in detroit. It's the folks in poland who will have to shift from coal to clean air Same thing with with south africa and the the folks in in the caribbean. And so there uh There is a conversation that needs to happen that we hope to kick off with this book and that if you think about these Three core parts of instability financial instability inequality and unstable climate climate and health systems If you put those at the center and you say hey dealing with these things are not charity They're not little issues that need to be dealt with that they need we need to rewire the system to make sure that These fundamental things that are public goods are at the heart of the system And that these are investments rather than charity Giveaways you start to have a different conversation with all different kinds of folks including the republican that you talk to In in detroit investing in people investing in infrastructure investing in a new economy Helps people get jobs and helps people get reelected And the big problem has been a lack of investment The investment that we've had has been towards a 21st century a 20th century economy And it's been anemic while we've extracted all of this financialization that has been going in a different direction Which has been feeding off of itself We need to make sure that the financial system and the trade system is oriented towards our development equality and climate change goals and if we Sit and have a set of principles that guide us and say hey, what are these fundamental things for the 21st century? We can rewire these institutions Uh towards those goals, and that's what we're really talking about in this book And I would just add rock. I mean, you know, we You know, I know people are Worried sometimes about historical parallels, but I mean using the new deal as a it's not an accident I mean, you know, I mean ironically those three things that kevin mentioned were of course central to the Roosevelt agenda Hey, there was an environmental crisis Uh linked to to to the dust bowl and other problems. There was a obviously financial instability and uh, the Came out of the great depression and and of course in uh, there was um Rampant inequality that had to be dealt with uh by the original new deal So, you know that you know in a sense, you know And and what we what I appreciate what I think has often been lost in that In in that telling of the historical story There was a strong internationalist dimension to the new deals They're often tarred as somehow kind of inward-looking a protectionist agenda And I find that to be very misleading in terms of of the of of the historical narrative And it's it's not an accident these the same people that The the that were concerned with these issues domestically often were the same people who were behind the the the original discussions to build a multilateral Architecture that that would also tackle these problems worldwide. You know when you list when you read, I mean, you know morgan thou Who's a Is a it has an interesting history and you wouldn't necessarily think as as being a kind of hero in that kind of world Is a kind of hero in our in our books and and his his I think that the the contribution of people like him to the original Bretton Woods stories often forgotten partly because you know, there was a strong pushback in the united states fairly early From 40s when after Roosevelt died against a lot of the original intentions of the of the designers of Bretton Woods I mean the pushback against that kind of need to control highly mobile speculative capital begins very early in the u.s I mean that's it's you know, it took them a while really to Rewire the system in a way that they wanted and it doesn't really happen till the late 70s early 1980s But you know, they began that pushback early early on and and you know And so it was a very conscious effort to to go back to the New Deal and its original intent To think about what they achieved and we're trying to achieve Back then and what is still useful? Today, I mean there are there have been significant changes, of course in the structure of the global economy since then that have to Be accommodated by any sort of new multilateral agenda, but there are real lessons from that period that need to be recovered, I think if we're going to have that kind of more inclusive and sustainable agenda that Kevin that Kevin talked about I'm drawn as I was reading your book to someone that with John Bellamy Foster and Robert McChesney turned me on to many years ago And it was a man called the Earl of Lauderdale He was the 13th Earl of Lauderdale and he read The Wealth of Nations by Adam Smith and he's I guess why I say he raised the specter in 1804 saying What do you mean? Air and water have no value because they have zero price if you cut them off. We all die And I guess what Adam Smith was saying was that exchange value When the population was small in relation to the planet meant that you didn't have to pay for air water And you could survive It seems as though That balance has changed and what I guess I'm getting at is This is a little bit like I made a podcast recently with a man named Peter Barnes from northern california it the idea is that the earth The water the ocean the fish The upper atmosphere our assets But they haven't been properly Treated as assets that need to be preserved cultivated enhanced whatever you want to call it We don't have the mindset that indigenous people had that were so dependent on the earth And perhaps since the industrial revolution, we've parted ways further with dependence upon the earth but these assets now It's almost like if you want to say the spirits are coming down on us pretty hard to change course and and it concerns me now because I feel like And we haven't talked about this yet, but the the nationalism and the fear that the ukraine Conflict is bringing to the surface Is taking us further to what I will call the the bismarck playbook When you can't handle all the fear and instability at home pandemic social and sustainability You declare a foreign enemy to rally everybody behind you to get them to obey But in this context with these other assets these public goods deteriorating That diversion of focus is going to exacerbate rather than ameliorate The kind of things we need to do together. How do we in china get together? when Xi Jinping in putin and the american administration are all playing Which might call demonization games with one another Yeah, look, I think that is I mean that is the major obviously a major concern that we have Where where we are in in geneva rob Um Because you know, I mean, you know power politics in that the big what the big players do is going to be critical That's clear. That was clear at cop at the end of at the end of last year um You know, I mean, I guess for us I mean kevin has pointed out that you know, china has done some pretty remarkable things Over the course of the last two decades including with respect to the environment Although it's still it is now of course the world's largest Single largest emitter that partly a reflection of its size partly of a reflection of the fact that it had to grow so quickly to be able to deliver the The huge reductions in poverty that people were celebrating until a few A few years ago, you know, I I guess my you know what worries me more out rob Is the attitude of the of the what is still the hegemon right the u.s. Despite all the talk of de-globalization and and The united states remains the hegemon in this world economically and militarily that's fairly clear um, and you and and you know, we we went through a Brief period with the new administration where there was a lot of talk about the parallels between The biden administration and and the ruseville Administration and the hope that that kind of same similar mindset would be and and including at the international level clearly biden had a much more of a multilateral spirit than than the previous administration had that that's clear But it doesn't seem to have lasted and I think behind it You know, and and it's the one it's this very intangible quality The the is critical but difficult to kind of pin down At both the national and the international level, which is the role of trust in any system The a system all systems have their different interests But if you have a system which is which has different interests and no trust It's very difficult to get any degree of consensus and kind of forward thinking in that system And and you know trust is being now hemorrhaged from the multilateral system and and the war is Is not is not the cause of that. I think it's it's it may well accelerate that in the way that you described But you know behind that is the hemorrhaging of trust from From particularly the most powerful countries in the world I mean trust is now a scarce factor in the advanced capitalist economies I think you know and and and I think that I think thinking about that problem of rebuilding trust In in the leading market economies has to be central to any Hope of being able to meet these challenges Through collective action at the multilateral level and that is a difficult problem to think through But it is a central issue in in this in in any sort of progressive discourse that needs to be needs to be constructed I was going to say you and I live in the united states when he talks about the deterioration of trust We have people like angus deaton and incase writing about the diseases and despair We have a guy like dental trump getting elected for president by running around saying the system is rigged I think he's right on target about one of the assets That is deteriorating in the united states Yeah, it's it's it's absolutely true and it's it's uh, it's disheartening to see that in a democracy where We should be deliberating but uh, we're turning from deliberating to to demonization You know on a professional level Uh, you know security and and and war is is a bit above my pay grade But I want to make sure we put uh put putin in a different category than than china And I think uh, one silver lining is that china has provided some healthy competition Uh to western hegemony on these issues The the west as hegemon has not really acted right we failed in pulling together the world To adequately deal with the financial crisis and again with covet uh, and it wasn't until uh China put together the belt road initiative and started building roads and infrastructure All around the world where all of a sudden the world bank and international institutions and and the west started saying Oh gosh, we have to start paying attention to infrastructure And so now there's infrastructure financing going on at the world bank And there's a whole global effort to try to do that and uh, sometimes this this competition is getting increasingly unhealthy Because the west is seeing it as a zero sum game Uh, but not to deny that china has geopolitical, uh motivations for all of their policy as do we that's what created the entire The entire regime in 1944 and the larger they get the more interest they have to protect around the world But their global policy on their belt road initiative is to help create interconnectivity And lay the the foundations in terms of infrastructure for the 21st century And just in march of 2021 they committed for that to be a low carbon belt road initiative They're no longer going to finance coal projects around the world and they're shifting into wind and solar and so I see that as uh, Let's the united states doesn't have a foreign policy like that europe doesn't have a foreign policy like that Japan doesn't have a foreign policy like that That's healthy competition that will help green these institutions And uh, if I think the the hegemonic states at this point, uh, really face a choice To bring us back to the trust conversation We need to learn how to make these institutions more inclusive in terms of governments Other countries and the citizens in those countries And we need to make them broader to deal with also issues of inequality and climate change And if we're if we don't there are increasing alternatives where countries can go if you don't like The kind of projects that you might get from the world bank, uh, you can have China finance a wind farm in your country, you know, argentina doesn't want to go to the international monetary fund because they keep making them privatize more and more And get rid of more and more government. So they went to china and got the largest solar power plant, uh in latin america So I see the rise of the rest as uh, alice ams then used to call it A good healthy competitive Signal to the world about how we need to be more cognitive and more inclusive And bring these issues right into the center Yeah, I think I think you're really Yeah, I think I think that speaks rob to uh, Sorry, I'll just say I think you're really talking about something that's very important in the dynamic I just had a nice conversation with kishore mabubani about 21st century asia A young lady named joyana chiu who writes for the toronto star is from china originally and they're they're Both capable of being very critical of china, but it's not all demon It's not all good all bad Adair turner who works closely with me here at inet talks about how we've had a pleasant surprise Because the cost of renewables wind and solar have come down so much because of the public investment In r&d. That's been done in china. So there's there's plus and minus columns in all of this and uh To demonize china is to miss some of the positive elements that I that you underscore And there's an important lesson there, of course for the what we try and say in the book, you know, which is The need again part of the original model was is this need to get back to public finance and public investment International and domestic which was the original intent of the of the of the breton woods model and and You know china is a is essentially a public finance public investment model You know one of our frustrations even though we are critical in the book about some of the recent policy conditionalities and other Practices of the multilateral institutions. They're massively under Funded You know given the given the kind of scales that they scale of the problems that they face and and the mechanisms that they could mobilize To to to address those problems. I mean we want to see more Financing come through the multilateral financing institutions, whether that's The international level or indeed at the regional level and and you know this you With respect to the climate issue, for example, there is a kind of knee jerk reaction That somehow only private finance can solve this problem And in any market economy private finance has to have a critical role The idea this idea that public public investment is somehow, you know, 20th century or mid 20th century as a as a as part of a policy paradigm is is is both deeply misleading But ultimately, you know, we'll we'll we'll make it increasingly difficult to deliver on the kind of projects The investment projects for mitigation and adaptation that you know as the IPCC report Essentially needs to be in place over the course of the next five years. I don't the private The you know private financing and particularly the way it's currently constructed is not going to deliver the kind of projects We're talking about over the next five years And and so unless we get the private the public financing model, right Get back to the the the role that development banks can play public banks can play The using sovereign wealth funds and other mechanisms It's you know, it's it's it's easy to take a fairly bleak view if you take the sign seriously of of of uh Of our abilities to meet these these exacting targets that people now know we have to meet. Yes uh There's a writer with the new york times who I recently talked to peter goodman Who's written his book which is getting a lot of attention called davos man But earlier than that peter and I talked about an article he wrote Which was called I believe it was in the new york times late 2019 called We love early 2019. Excuse me. We love the robots And it was about the process of a society embracing transformation In other words what economists call the production possibility frontier improves with an innovation But how you transit Who gets damaged who are the losers who are the winners? We used to get that parable when we were taking economics courses Free trade can make everyone better off and nobody worse off But the asterisk on that comment is you've got to do the transformational assistance I have friends from west virginia now who are telling me where you grew up in detroit You expect us to play along with this global public good and get trampled We need to work with china But a whole lot of americans Who got trampled by globalization with no assistance either from tech You know, uh machine learning and automation or from globalization Don't want any part of that But that's not a failing of the possibilities. That's a failing Of our political economy and the transformation that could have made everybody better off And we have to start to see that Like we talked about The pervasiveness of the side effects and how We choose a pathway that considers everyone it's it's almost as if People have to be Given more power and money less power Where we might call votes But but it's very very daunting to see how despondent and discouraged americans are about the possibilities Of global cooperation at exactly the time as your book underscores in many contexts is necessary How do we how do we start that rebuilding of that trust that you've been talking about? Well, our our book is uh is one very small, uh uh Effort to try to start a conversation to put some of this together and what you're referring to is is what a lot of us call A just transition and what we say in this book that we really need a just transition within borders and across borders And the great experiment with free trade and globalization from 1980 to 2020 uh Created an incredible amount of structural transformation and an incredible amount of wealth creation But those that were left behind were just completely left behind like you said the production possibilities expanded They were Pareto efficient but folks in detroit rural farmers in mexico industrialized workers in in brazil and in south africa These folks were not the winners and there was no public insistence No steering of financial of private sector finance to help those entrepreneurs those communities and those workers Get the opportunities in the new in the new sectors And we can't make that mistake that we made on globalization the mistake that we make On structural transformation for reworking the global economy into a low carbon and more socially inclusive one It is clear that the polans and the kentuckys and the south africans and the trinidad and tobago Do not have those natural assets that they were able to export and create livelihoods for in the 20th century Those are going to be stranded assets into the 21st century We can strand the assets, but not the people and not the entrepreneurs and not the communities And that's an underscore a role for global public institutions for the north south component If the europeans are going to have a carbon border adjustment tax Well, part of that tax should go to finance Transitions in places like mozen beak that's export so much So much carbon intensive activity to To the europeans and just like in the united states our economy will be much better off as we go low Low carbon if you incorporate the externalities But certainly certain sectors communities and workers are going to shrink And we need to make sure that those folks are put at the front of the line That we're investing in those people in those places so they can be part of the transformation Because what we've learned from globalization you talk about the rise of right-wing populism and donald trump and all this global conflict Is that we see a lot of this rise of conflict as a symptom Of not doing the globalization transformation right over the past 40 years We have to do it and as the ipcc report tells us we have to do it now And and we have done it before rob. I mean that you know one of the funny things about the right the china story is that You know back in the 60s and 70s the rise of countries like japan and the first the east asian nicks was And their their rising share of global trade was was tremendously rapid Now it's just that at that time the response was not to kind of Become more introverted it was to it was to invest in alternative job opportunities For people in coal mines in the north of england or textile workers in the in new england because you know You could you could generate better jobs for people than those Than those kinds of jobs, but of course it requires this it requires a I mean it requires a capitalist class essentially that is willing to Take take its profits and reinvest those profits in job creating areas And and that's what happened to some extent in the 60s and into the 1970s You know you in a world where huge chunks of profits are being used to buy back shares or to to pay out large dividend payments Then that social role of investment is is being eroded and and and the and the and the symptoms that We've seen the the kind of pathologies Of 21st century politics follow from that inability of the system to use the resource It has available to create new opportunities for people that are Moving out of declining industries and in our in our story those new opportunities have to be in a low carbon Carbon or carbon-free economy and and the opportunities are there We have some systemic problems though that make that virtuous circle I think difficult to difficult to establish but again, I would go you know we would I would go back at least to to kind of Getting back to a story in which you know the opportunities for public investment are Given much greater room gets but gets us back to some awkward questions about About do we need to nationalize the fossil fuel industries to be able to make the kind of changes that that kevin Talked about I mean this takes you into more politically uncomfortable territory but but you know the it's not that we haven't been here before we have been here before and and You know, we did some things right then we did some things wrong then I think learning those lessons as we move forward to meet these 21st century Challenges as you know is at least in a small way the intent of the book And I think it's a conversation that is urgently needed if we are going to address these problems. Yeah I Haunted at times going back to your reference to the new deal There seemed to be a time when if you looked at public opinion polls People on the far right would just say worshiped markets and people on the left worshiped government And what really haunted me is during the obama years And by the way, I would always recommend uh, david seroto and alex gibney's new podcast called meltdown About the deterioration of the country in the aftermath of not doing what that opportunity that crisis created but What I saw in 2010 and 2011 Was polls like the gallop poll About belief in government And what happened was the people on the right still believed in the market But the people on the left thought government was captured And the reason I raised that specter now I Have read a book uh, but you're so good By Naomi Klein's older brother seth Klein called the good war about the essentially the analogy to Canadian war preparation At the time of world war two they entered the allied side three years before the united states and Seth talks about Essentially the need to do that But a whole lot of very interesting people like jeff man and joel wing right and they said whoa, whoa, whoa, whoa We're in a place where people are so afraid government is captured If we give them that power will they actually do good or will they'll continue in what you might call the rent extraction process and so inspiring the body politic of the need for the state and the Pervasiveness of externalities public goods like we've been talking about seems to me to be a formidable challenge Because of the woundedness in recent years in the distrust of governance that is ensued How do we how do we overcome? You know, you can sing we shall overcome, but we got we got to have a hypothesis here. How do we get there? and I think you know look guys I went to a conference recently That was a exploration of dr. King's speech time to break the silence beyond vietnam And you guys Are like dr. King you're calling out the truth, you know He took quite a beating new york times washington post many of the Affiliates that he had in the civil rights movie got mad at him because he went after that when he talked about militarism Materialism and racism as the triad of poisons to our society But I've watched you write a book kind of like his speech You rose to the occasion you broke you brought this out, but how do we now? Evolve Which you might call the north star you created. How do we create the spaceship to get us to that north star? Well, it's interesting that you say that uh that you just read that because if you if you look at page one in our book Uh, we actually quote dr. King and I should say on this podcast a great uh a great graduate of boston university here If I could I'd love to share that quote because we we we feel like that those words Around the vietnam war really ring true for the call that we're making today He says we are now faced with the fact that tomorrow is today We are confronted with the fierce urgency of the now In this unfolding conundrum of life And history there is such thing as being too late This is no time for apathy or complacency. This is a time for vigorous and positive action So we are re echoing that same call that he made and saying gosh those words are even more resonant Or just as resonant now And especially if you bring climate change into the story and listen to what the ipcc just said But how to do it? We are researchers economists and think tanks. We're writing a book to try to have a global Conversation But in our last chapter we uh We evoke uh the words of another great person in history John kenneth galbreth and his concept of countervailing power One of the reasons why the roosevelt administration and ensuing years moving forward was that there was coalitions of countervailing power Different kinds of actors that were able to negotiate with capital to be able to discipline capital and discipline the state We think that the capital needs to be disciplined the state needs to be disciplined and these international institutions We're not saying pump more money into the government into the international monetary fund It's going to change these problems is that there where there needs to be countervailing power And we see it in in a lot of different places. I already mentioned that china is a healthy form of global competition on some of these issues Uh the different movements. We see uh amazon organizing for unions in the united states We see the green new deal movement in the united states We see the fact that the european union has legislated net zero and has Legislation that they're deliberating about about just transitions those are the kinds of Countervailing power that you can see in the north and what's inspiring now in the south Especially in the midst of russia's war in ukraine is the reemergence of a non-aligned movement A reemergence of a number of countries around the world that of course are going to condemn the obstruction of Of the sovereignty of an individual nation, but they're not going to They're they're not going along with with sanctions and they want something to be done with the global economic ramifications The fact that oil prices and wheat and grain prices are skyrocketing when before the Invasion of ukraine in january with the world bank sounded the alarm and said that just the interest rate rises in the united states might put 60 countries that are in debt distress over the cliff Into a debt crisis and we already saw sir lanka Making that step over that now with the with the spikes in in grain and oil That debt issue is even an even bigger one and if we have a debt crisis Like we had in the past that again hurts everybody here Wherever you are in in the world Richard you want to add Yeah, look, I mean that's you know for us building coalitions amongst developing countries is is critical to rebalancing the international Order is and and we have to be honest It's what we lack at the moment say compared with the 1970s when we got the initiative to try and Create a new international economic order that developing countries Pursued through the through the united nations But but you know as kevin said there are there are clearly signs of Of change I think a number of the idea I mean and to take just to follow up on kevin's point, you know, I think there is a growing recognition That we cannot suck we cannot Make the kinds of investments that we make to that we need to to make to deal with the climate and And other problems given the burden of debt that many developing countries now Operate under it's it doesn't just doesn't work doesn't add up and and I think there is Slowly a move to to fill this gap of of of within the multilateral order of a of mechanisms that can properly handle the the the the debt problem and Martin guzman There's you I think you know that the finance minister of of argentina rob has always said we have a system That delivers always delivers too little too late and countries even if they go through some sort of restructuring Often find themselves back in the same position four or five years later Not necessarily through any corruption or incompetence on their part But simply because outside pressures just kind of force them back into a corner and and so and and and so You know, and I think there is a real serious conversation now building To to to to to think more creatively About the about the need to handle an issue like that Which is it's going to be the big issue for the next three or four years in the developing world In a much more effective way than we Then we have, you know, there's the famous aphorism of but olbrecht because things are the way they are Things will not stay the way they are and I think that at this moment in time I think that's a particularly appropriate kind of Degree of optimism for thinking about the the the challenges ahead that we face well, kevin I am smiling when you reminded me of dr. King Being at boston university In part because the person that I am most immersed in reading for my own Education my own evolution right now Was his mentor a man named howard thurman Books like the luminous darkness Are extraordinary and this is a man when he was trying to figure out in early in the 20th century how to be effective He got himself Sent to india to meet gondi And explore how to be which amount called fears And inspire trust or alleviate fear at the same time And he is a very very profound influence on dr. King When I was at this conference a few days ago Uh, dr. King's youngest child bernice king was one of the speakers at the end And she and the other panelist andrew basevich from the quincey foundation the former military official and others were were really quite powerful And I started thinking about The question Of how fear Is really the obstacle In the way of what we need to do Your book as a north star Gives us a destination We know where the voyage has to go through the clarity and the insight and the profoundness of your argument But to alleviate fear As we've talked about we also have to bring the trust together. We have to have Action we have to see people doing things that deliver results But I think the alleviation of fear Was very profoundly in the mind of dr. King in his writings And at this conference they closed with a song And the name of the song by a man named brian courtney wilson His fear is not welcome In the beginning of the song I'll read you the lyrics Let me begin and confess. I need your healing I may I made a friend of the fear that I have been feeling And I believe the lies it spoke that led me into doubt But I'm calling on your angels army now and then the chorus Fear is not welcome fear is not welcome fear is not welcome in my heart anymore I'm casting it away By the power of your name fear is not welcome in my heart anymore