Jeffrey Sachs Keynote Speech - Singapore Economic Review Conference 2026 Opening Plenary

[00:00:00] well we welcome Jeffrey again from last year I think we met a very productive engagement [00:00:08] interaction at that time Jeffrey was speaking primarily to the members of the economic society [00:00:14] of Singapore now professor Jeffrey Sachs needs as I said earlier needs no introduction but he's a [00:00:21] well-renowned economist best-selling author innovative educator and global leader in [00:00:27] sustainable development he's widely recognized for bold and effective strategies to address [00:00:33] complex challenges including escape from extreme poverty the global battle against human-induced [00:00:40] climate change international debt and financial crisis national economic reforms and the control [00:00:47] of pandemic and epidemic diseases professor Sachs serve as a director of the center for sustainable [00:00:53] development at columbia university where he holds the rank of university professor which I said [00:00:58] earlier was the university's highest academic rank Sachs was director of the earth institute at columbia [00:01:04] university from 2002 to 2016. he is president of the united nations sustainable development solutions [00:01:13] network co-chair of the council of engineers for energy transition again academician of the pontifical [00:01:20] academy of social sciences at the vatican commissioner of the united nations broadband commission for [00:01:26] development tan sri jeffrey chia honorary distinguished professor at sunway university [00:01:32] and the sdg advocate for united nations secretary general antonio guterres and from 2001 2018 [00:01:41] professor sachs served as special advisor to the united nations secretary general kofi annan [00:01:46] ban ki moon and the latest antenna guterres professor sachs has authored and edited numerous books [00:01:53] including three new york time bestsellers the end of poverty in 2005 commonwealth economics for a crowded planet [00:02:01] 2008 and the price of civilization 2011. other books had included to move the world jfk's quest for peace [00:02:11] in 2013 the age of sustainable development 2015 building the new american economy smart fair and sustainable [00:02:20] 2017 2017 a new foreign policy beyond american exceptionalism 2018 the ages of globalization geography [00:02:28] technology and institutions in 2020 and most recently ethics in action for sustainable development 2022 [00:02:38] professor sachs is a 2022 recipient of the tank prize in sustainable development and was a co-recipient of the [00:02:45] 2015 blue planet prize which is the leading global prize for environmental leadership [00:02:52] he was twice named among time magazine's 100 most influential world leaders and he has received 42 [00:02:59] honorary doctorates and his recent awards and included legion of honor by decree of the president of the [00:03:05] republic of france and the order of the cross from the president estonia prior to joining columbia [00:03:12] university sex professor sachs has spent over 20 years as a professor at harvard university and most [00:03:18] recently as the galen l stone professor of international trade so i think uh the the the the list of his [00:03:27] achievements the present goes on and on and so let's hear it for the man himself professor sachs we welcome [00:03:33] you to the stage so many colleagues friends co-authors uh students um and uh i'm very proud and very very [00:03:47] happy to be here and houston i thank you very much for the great honor of being able to give [00:03:54] this speech and minister chi thank you for all your leadership it's so nice to hear a rational government leader [00:04:05] we miss that so much [00:04:09] you know calm rational trade-offs ideas common good these are words from the distant past [00:04:20] but they're so nice to hear and um it's wonderful to know that they are really alive [00:04:28] and well here which of course they are and alive and well in asia which is my my theme today i want to talk [00:04:37] about uh the return of asia to center stage and by that i mean uh the historic epoch [00:04:49] that has ended and that has begun we have been in a western-led world [00:04:57] depending on how one counts it for 250 years or 500 years it's odd that given where we are on the planet [00:05:07] we're communicating in english which is the language of a small group in a distant island [00:05:15] uh off the western coast of eurasia thank you why are we speaking in that language well it's the only [00:05:24] one i can speak in but it's also because of this past 500 years earlier we might have spoken in arabic [00:05:34] or we might have spoken in persian or other lingua franca at different times but english would have [00:05:43] been a very distant guess probably about 60th on the list if we were standing in the year 1500 and [00:05:51] asking what language would we be speaking in in a conference in 2026 on an island near the strait of [00:05:58] malucca uh so uh this is already uh the world that we have been living in it's over now asia has returned [00:06:12] to the center stage asia once again dominates the world economy and i think will dominate world politics [00:06:22] going forward and i want to talk about that not as the rise of asia but as the return [00:06:29] of asia because this is of course the great historical norm of the last 2000 years [00:06:38] and the period of the western domination was the anomaly roughly 250 years of approximately 2000 [00:06:50] years that we can talk about in a relatively coherent sense of course before that there were many other [00:07:00] things to talk about uh but i'm going to start in 1 a.d just like angus madison did [00:07:08] uh in his data because that's uh the most reliable way for us to start and it's a meaningful date [00:07:16] because at that date we had two uh united powers one on the eastern end of eurasia one on the western [00:07:26] end of eurasia almost the same population almost the same size from what we can gather roughly the same [00:07:34] living standards and if you put it in current terms roughly the same gdp uh in the aggregate and per capita [00:07:42] that was of course the han dynasty on one end and uh the roman empire on the other end [00:07:50] each about 60 million people each about 5 million square kilometers uh and roughly the same size and [00:07:58] and i want to trace the broad macro history of eurasia during this 2000 years it's distinctive [00:08:12] we know it but i think it's worth quantifying and i want to quantify it in three different ways [00:08:19] uh to talk about the broad uh dimensions of output in uh the uh old world if i could put it that way which [00:08:32] was dominated uh both demographically and economically by eurasia africa always being a much much smaller [00:08:42] uh share except in 70 000 a.d when it was the only place of homo sapiens but in the period of the last 2 000 [00:08:52] years eurasia dominated and the americas were of course not only separated from the old world for the last [00:09:06] probably 12 000 years from the end of the beringian land mass but economically they were very very far [00:09:15] behind for a reason that i'll mention as well so i want to talk about three ways of measuring the return [00:09:25] to asia one that is most familiar trying to assess the shares of the world economy in different regions of [00:09:35] the world one looking at this geopolitically where were the unified large polities of the period of the last [00:09:46] 2 000 years and there i'm going to emphasize china's unique not only in asia but in world history china [00:09:57] is essentially the largest continuous polity in the world and it has no rival [00:10:05] in history except for brief periods the rival in the west was the roman empire which lasted depending [00:10:15] on if you count the imperial period uh from 27 bc to 476 a.d in the roman west uh and that was the end of [00:10:28] uh unification of europe until today and there was never unification of any other part of the world [00:10:39] at anything remotely like the scale of china and there was never uh for china any extended period of disunity [00:10:49] uh except roughly the uh 300 years between the end of the han dynasty and the beginning of the sui [00:10:59] dynasty which was 581 a.d so for all the period from chin up to today china has been mostly unified at a grand [00:11:13] scale and there is no uh rival at all in history to that uh and it's a point that i think is important [00:11:23] for us to understand that's a real return of china to center stage and the third is uh in honor of and [00:11:33] following the lead of danny kwa who in 2011 wrote a wonderful paper about the shifting center of gravity [00:11:42] of the world economy and i want to go back to that methodology as well take it back to 1ad using new [00:11:50] data that we have available uh digitally and take it up to uh 2100 as well so three different visions but [00:12:01] they all lead to the same basic point and there's a fundamental underlying point which is that for the [00:12:09] the last 2000 years asia has been home to between 60 and 70 of humanity and roughly speaking aside from [00:12:21] very strange perturbations asia has therefore been home to roughly 60 to 70 percent of world output [00:12:30] and by the peculiarity of china asia has dominated the large powers of the world so this is the part of the world [00:12:41] that is um demographically dominant and as we know as economists ideas and technologies diffuse [00:12:53] and so things even out over the long term but the long term can be a pretty long term it can be hundreds [00:13:00] of years of inequality and unequal geopolitical power but demography in the end has reasserted itself [00:13:12] let me say to put the center in all three senses in economic output in geopolitical power and in [00:13:24] the center of gravity of the world back in asia if you could mention this to donald trump we could save [00:13:32] some time uh in the next few years uh this is unfortunately unknown in the united states and uh [00:13:41] absolutely unwelcome uh in the united states as i'll emphasize but this is basically what i would like [00:13:48] to talk about so mind the scale i apologize this is not an even chronology the first uh measure is [00:14:01] one ad following madison's data and the next is 1000 ad and the third is 1500 ad so this is not [00:14:11] reset uh for a linear axis on time but the solid red line is best estimate of the share of the world [00:14:25] population in asia and the blue line is the share of the population in europe uh and of course where europe [00:14:36] is and where asia starts is itself uh an arbitrary division the idea that europe starts in the urals for [00:14:45] example is a mid-19th century gloss that was actually promoted by russia to say we're really european [00:14:54] uh so europe goes all the way to the ural mountains where you want to divide europe and asia is a bit [00:15:02] uh arbitrary i'm generally taking europe as europe x russia anyway in these calculations russia is both [00:15:12] europe and asia by any measure uh by land area it's asian by population it's primarily european and uh by [00:15:23] uh by uh history and temperament it's both uh and so uh it's a complicated uh complicated uh question [00:15:33] but the point is that the solid red shows the continuity of asia as the dominant part of the world [00:15:44] population africa's population has typically been between five and ten percent of the world population [00:15:52] and the america's population has typically been between five and ten percent of the world population [00:16:00] i think it's worth saying one thing about the america's just why it isn't also ran it's of course debated [00:16:09] uh but the america's never achieved uh anything close to the demographic base or the technological development of [00:16:22] the uh rest of the world the old world if you want to call it that of eurasia and africa [00:16:30] and partly it was cut off from any technological diffusion and most of the world lived in [00:16:37] the other part of the world and a larger population gives a larger market more innovation more diversity [00:16:44] and more technological development and none of that came to the americas but my own view was that the [00:16:51] americas also fundamentally suffered from a terrible policy mistake made around 10 000 years ago it wasn't one [00:17:02] moment but it was to drive horses to extinction uh which uh the amerindian populations did in north america [00:17:12] sometime around 8 000 years bce they hunted them for food uh this is called unsustainable development [00:17:23] because if you hunt your horses to extinction you end up walking for the next 10 000 years and they walked [00:17:32] basically there were no land animals of any size other than the camelids in uh coastal peru so the incas [00:17:43] were the only ones that built any empire of any geographic scale in the americas until the colombian [00:17:52] exchange of 1492 when horses were reintroduced but then they came with european conquerors on their back [00:18:01] and so by the end of it the amerindians were driven to extinction by genocide and disease [00:18:09] or near extinction i would say by genocide and disease so don't kill your only source of mobility [00:18:17] this is a basic point of and it's why we can focus most of world economic history and center of gravity [00:18:27] in the old world rather than the new world just to mention one other quick point when the europeans [00:18:35] arrived they brought pathogens as well as weapons and horses and the pathogens primarily were the source [00:18:43] of a decline of population by around 90 percent between 1500 and 1600 and it said that so much vegetation grew [00:18:54] back when the land was not cultivated after this mass die-off that it led to the little ice age in europe [00:19:02] in the early 1600s because so much carbon dioxide was reabsorbed in the vegetation of the americas that it [00:19:10] actually led to a global cooling uh of modest scale but enough to cause the little ice age of europe in [00:19:18] the first half of the 17th century now i'm going to put aside the americas except when the united [00:19:25] states uh it comes into this picture at the end of the 19th century so what you see here in the dotted line [00:19:33] of course is the gdp share and gdp and population roughly tracked as late as 1820 which you can think [00:19:46] of as the end of the napoleonic wars in europe of course by 1820 europe was already uh significantly [00:19:59] higher output per person than asia on average but you could say as kenneth pomerant famously has said [00:20:09] uh until the early 19th century there was no definitive uh dominance of europe over asia [00:20:18] in economic output uh or in economic power of course what changed in the 19th century was the industrial [00:20:27] revolution what had changed between 1500 and 1800 was a gradual rise of europe that i attribute mainly to [00:20:36] having this open uh american continent available to europe so it's like suddenly having uh all this land [00:20:44] area for social housing uh you could put all your excess population you had gold silver uh food sources [00:20:54] cotton uh with slaves and uh in entire americas available to europe that gave the primitive capital [00:21:04] accumulation that eventually together with the uh scientific and industrial revolution enabled europe to [00:21:11] conquer asia in the 19th century but as late as 1800 asia was still uh more than uh about [00:21:24] uh 60 percent of world output uh it was not definitively defeated in any sense by uh uh europe [00:21:36] india was half conquered and it would be completely conquered in the first half of the 19th century china [00:21:45] would have its century of humiliation beginning in 1839 with the arrival of the british gunships in the pearl [00:21:54] river uh in guangzhou but as late as 1820 you would still say asia was the predominant center of [00:22:05] the world by most measures though no longer by economic power or technological dominance then what you see [00:22:15] this is again the well-known madison data the collapse of asia's share of gdp [00:22:22] that is essentially asia-wide century of humiliation and imperial rule from europe and asia share falls [00:22:31] from 60 percent of world output in 1820 to around 20 percent of world output in 1950. [00:22:42] if you were at 20 percent of world output and 60 percent of world population you're at one-third of the [00:22:48] world average and vastly behind europe in 1950 and this was the nadir of europe of asian power and asian [00:22:59] economy in 1950 and then the curve the dotted line yellow dotted line which is asia's share of world output [00:23:10] then rises back to 50 percent of world output where it is today so essentially from 1 a.d to 1500 asia's [00:23:23] clearly the dominant center of the world europe is a a very rough impoverished appendage from [00:23:34] 500 a.d to 1500 a.d to 1500 a.d at that point after the discovery of the americas principally but also the [00:23:46] beginning of international trade through the cape of good hope and the indian ocean trade that vasco da gama [00:23:54] initiated between europe and asia europe rises in per capita income asia stagnates uh in per capita income [00:24:06] uh population continues to rise in china quite markedly actually in the 16th 17th and 18th centuries [00:24:14] because the potato was introduced other foods are introduced there's a huge rise of food supply and a [00:24:21] huge rise of demography but between 1500 and 1800 europe gradually gains a military advantage over asia [00:24:31] and then the 19th century is the definitive short burst of european imperial power [00:24:39] i should just end by saying at the end of the 19th century [00:24:44] japan industrializes uniquely in asia and in 1894 attacks china and wins the sino-japanese war [00:25:01] and when the chinese minister asks his japanese counterpart [00:25:09] why are you attacking us we're being hit by the barbarians from europe and you're attacking us [00:25:18] the japanese minister apologizes and says i'm sorry we've joined their club [00:25:25] that's literally the words as ezra vogel reports and japan gives china hell basically from 1894 to 1945 [00:25:37] and this is another part of the story of geopolitics it is civil war as much as outside war that destroys a [00:25:48] region europe went into asia went into civil war between 1894 and 1945 and that was devastating for asia [00:26:00] europe went into europe and so we should always think of the geopolitics both as the [00:26:14] external as well as the internal disarray and both europe and asia went into [00:26:21] civil war from the end of the 19th century to the middle of the 20th century and that was [00:26:30] actually both bled so badly that in the end only russia and the united states stood basically the united [00:26:39] states stood alone in 1950 as the undiminished uh industrial power but the collapse of europe [00:26:50] through civil war two civil wars uh world war one and world war two opened the way for [00:26:56] asia's return to the world stage so we can trace in per capita income uh the top line is the united [00:27:07] states relative to the world average the blue line is europe x russia relative to the world average [00:27:16] and the red line is asia relative to the world average asia was roughly at the world average for [00:27:26] eighteen hundred years from the beginning of the first millennium till [00:27:31] the napoleonic wars and then the catastrophic decline from 1820 to 1950 and now the return to world [00:27:39] world average but still quite far behind the uh gdp per capita of the us and europe though i think that [00:27:48] the actual gap is less than is recorded in the data and of course singapore is ahead of everybody um well [00:27:59] done and a pure violation of the convergence principle because uh uh you break the trend you're supposed to [00:28:09] slow down as you reach the quote limit but singapore decided it would just set the limit [00:28:17] and it it kept growing uh well beyond the us and european per capita income levels [00:28:24] ah too much to talk about here except that i also divided the world uh into uh more geopolitical [00:28:34] uh fine-tuned uh fine-tuned units and just to say that the indian and chinese units of the world geopolitically [00:28:44] uh have long constituted 50 percent of uh world uh population uh for a very long period of time [00:28:55] uh europe another uh 15 percent or so all of asia 65 to 70 percent of world population uh and um [00:29:09] if you look at the regional share of world output and this is just made by taking [00:29:15] uh madison data and then applying it grid by grid to uh whatever uh whatever spatial divisions of the world [00:29:27] you have uh take country averages overlay them with political units uh you can calculate and and population [00:29:38] weights you can come up with some estimates of the amount of gdp produced within each uh each unit and china [00:29:50] and india constituted roughly half of world output up until 1820 and then by 1913 this had already declined [00:30:02] to 15 percent of world output and it declined further to 1950 which was the bottom it's not shown in in the [00:30:11] graph here well asia began its recovery in uh 1950 i think the fundamental point of the restoration was [00:30:24] sovereignty so it was independence of china in 1950 and it was the independent of 1949 excuse me and the [00:30:34] independence of india in 1947 which were the two most decisive events because what had held [00:30:41] back asia was european imperialism more than anything else and japanese imperialism uh against china [00:30:50] from the 1890s to 1945 in 1998 i published a book which nobody ever heard of um because it was the worst [00:31:03] time publication i ever wrote uh i published a book for the asian development bank called emerging asia [00:31:11] asia and it said asia has a glorious future asia is going to converge asia is going to continue to grow [00:31:19] rapidly asia's share of world gdp will rise by 20 percentage points roughly by between the mid-1990s and 2025 [00:31:32] the book was the book was completely right and it came out two weeks before the asian financial crisis [00:31:40] and so i think adb was humiliated uh what are you publishing a book about emerging asia and we're in a deep [00:31:48] crisis so this book disappeared it disappeared so much that when i went last year to find my copy because i [00:31:59] remembered that i had had a table about 2025 so i wanted to see how i did i couldn't find a book myself [00:32:09] so uh i went on amazon and i was able to get a book for 97 cents [00:32:18] it's now out of print entirely you can't even get it on amazon anymore but i got my copy and i went back to [00:32:26] look at what i had said and it pretty much hit the mark but the basic idea was using standard ideas of [00:32:34] of catching up uh of barrow lee economics uh of uh um of uh convergence you could track pretty much what [00:32:45] happened between uh uh between uh 1995 and today and it raises just a semantic question [00:32:57] was there an asian economic miracle um in some sense yes because this is the best performance on a [00:33:06] sustained basis over a large population in world history without question [00:33:11] absolutely rapid growth and also in the sense that when paul krugman denied that there was [00:33:18] an asian economic miracle he said china would collapse sometime around 2010 he said it was the soviet union [00:33:27] repeated just in intensive investments and it didn't amount to any real development that would be [00:33:34] sustained but from a conventional growth framework it's not a miracle it's accountable uh and what was [00:33:44] the anomaly what is asia being so poor that was never the history of the world that was the result of [00:33:53] european imperialism that was the result of geopolitics primarily it was not the result of any intrinsic [00:34:01] features it was not the result of protestantism or this or that or any other uh deep sociology it was a [00:34:09] very short live phenomenon of a 200 years roughly or even 150 years or if you want to take china's [00:34:18] definition a century of humiliation which is 110 years from 1839 to 1949 so uh the book got it right [00:34:29] uh i'm trying to revive the idea that the book was there to say this is not so unexpected what happened [00:34:38] and i'm glad i was able to find a copy by the way when i asked adb when i was there earlier this year for [00:34:44] a copy they also didn't have a copy so but they did have it on microfiche so i was able to get a pdf made [00:34:54] of of of the book so let me turn to the second dimension which is great powers this is a geopolitical [00:35:02] dimension not just an economic weight dimension and what is a great power it is a polity that has unity [00:35:14] and capacity to act in a unified way and i define great power simply as a political unity that has five [00:35:25] of gdp or more and in today's world there are uh you could say three clear cases of this uh that standard [00:35:40] which is the u.s india and china so you could say two of the three great powers of the world are asian [00:35:48] uh if you include europe generously uh in this if you pretend that there is a europe called a union [00:35:58] and that it can act like a union then it also fits the description and i would put russia into this list [00:36:06] as well it doesn't meet the five percent of gdp criterion but the land area is so vast the resources are so [00:36:17] vast and the nuclear arsenal is so vast that i think excluding russia from great power status would be a [00:36:24] huge analytical mistake precisely the one the united states made in 1991 by the way but it is um i put it [00:36:34] here so i would say that there are five great powers by this definition i went back to ask about great powers in history [00:36:46] starting with uh basically the common era again 1 a.d we now have wonderfully digitized data to be able to do [00:36:57] that the cleopatria uh data set has uh political uh administrative jurisdictions uh gis spatially uh [00:37:10] available jurisdictions for the last two thousand years uh for thousands and thousands of empires and [00:37:18] entities the hide data set has raster data for population over the two thousand years [00:37:26] powers so you can get polities you can find their population and you can use madison to estimate the [00:37:36] income level uh of the people in that jurisdiction and that's what i've done is to put those three data [00:37:42] sets together to ask which were the big powers in different periods of time and i think it's quite [00:37:51] interesting there are not that many major powers in history because fragmentation of polities is the norm [00:38:00] or fragmentation of regions is the norm unity is the exception and uh in 180 or 1 ce the han and the roman [00:38:11] empires were the two great powers of the age all of the rest of the population in eurasia was in smaller political [00:38:19] units with less than uh five percent of world output for all of the periods in history china has been a great power [00:38:31] it's not always been the dominant power it's not only always won the war but it has never uh fallen below [00:38:38] five percent uh five percent uh of uh except sorry in 1950 uh it disappeared uh from by 1913 sorry no sorry [00:38:48] 1913 still there 1950 uh it loses the status temporarily but for two thousand years china uniquely uh [00:38:58] has a centralized polity that is more than five percent of world gdp it's the only place in the whole world [00:39:08] uh that has uh that has anything uh that has anything like this history um and what you can see in [00:39:16] 1000 a.d for example it's only the song dynasty uh that it would [00:39:23] have five percent or more of world output in uh 1500 a.d it's the ming and the ottoman empires there's no european power [00:39:34] that has five percent of gdp or more by 1600 the spanish empire uh now has uh reaches six percent of world [00:39:46] output so it's temporarily a world power but asia has the ming the mogul and the ottoman empires as [00:39:54] the three great powers of the age by 1700 spain has uh declined uh basically uh spain's uh in uh sharp [00:40:07] retreat uh france is the rising great uh land power uh and in 1700 it's uh the ching uh the moguls uh [00:40:18] which is uh the high point of indian unity before independence in 1947 uh and the last remaining [00:40:29] moment of unity uh and and france uh by 1820 britain shows up uh as now 18 percent of world output [00:40:39] that's 18 percent including its colonies uh mind you that's not uh metropole britain but that's the [00:40:46] british empire that i'm talking about um the u.s uh sorry britain russia france are the three great [00:40:55] european empires and the ching is uh the only european uh power that keeps the five percent of gdp [00:41:08] of course that's the apogee of uh china's status 1820 because 1839 is the first opium war and uh [00:41:20] the beginning of the century of humiliation um and so forth but the point is that for most of history of [00:41:31] course asia asia not surprisingly was both the dominant site of gdp the dominant site of population [00:41:44] and the only place of great power uh in terms of large polities and that i think is important [00:41:54] this graph is a little hard to read but the dark shading uh is uh the periods of unity unity of china [00:42:06] unity of europe and unity of uh india and i'm sorry the graph is not great uh the dark lines of india are [00:42:18] when the whole subcontinent is unified so the maurian empire and the moguls very short period of time [00:42:28] the lighter shade for india is when the indo-gangetic plain is unified the uh delhi sultanate uh and other [00:42:37] periods when it's just northern india you see that europe was unified during the roman empire and then not [00:42:45] again and the small shading is charlemagne and uh the brief shading is napoleon uh at the end but europe [00:42:56] has never been reunited and the current experiment of the european unity european union is the attempt [00:43:05] at unifying europe and it's definitely a work in progress because this is really 27 sovereign countries [00:43:13] with the some common regulations but it is not a polity in any foreign policy sense right now um china is [00:43:23] unified during most of its history of course the longest stretch uh after uh the han there was uh [00:43:38] actually i don't those dates don't look quite right to me but um [00:43:53] i can identify from the middle onward which is sui uh up until uh tang uh and then 50 years of uh of uh [00:44:06] uh non-unity and then i think it's a song uh and then a song uh partially disintegrates and then ming ching uh [00:44:18] uh uh the fall of uh the qing dynasty in 1912 and the people's republic of china starting in 1949 [00:44:28] so china is the only place like this and here's one more uh image that i think is helpful this is the [00:44:39] share of the world population in different political units in different phases of history the red at the [00:44:47] bottom is unified china so china is the only political system in the whole world that has had roughly 20 [00:44:57] percent of the world population or anything remotely at that scale in one unified polity [00:45:05] and it is a mindset a legacy a history a political culture that has no comparison in the world [00:45:16] let me just say one quick issue for us as as students of history and economic history why did china achieve [00:45:28] unity and europe and india did not achieve unity for example and i think it's a of course it's a famous [00:45:38] question in history um i have two answers uh basically geography and uh uh geography and uh institution [00:45:52] cultural factors in the case of china the geography is very good for unity because china's a box [00:46:02] and it's a box with the steppe region on the north the pacific to the east the rain forest and the himalayas [00:46:10] to the south and the himalayas and the pamirs and tianchen mountains to the west the tibetan plateau [00:46:18] and so it's a a nice uh box that is mostly uh the river plains of the yellow and the yangtze river [00:46:29] and i think that that explains a lot uh that there's a clear geography um but there are two other things [00:46:38] that i think are crucial for china one on the geography side is northern and southern china were linked [00:46:45] as early as 610 through the grand canal so the yangtze river system and the yellow river system [00:46:52] were interconnected in one civilization uh and uh transport uh made that possible and the other [00:47:01] great innovation of china uh which i think was decisive was the linguistic innovation of uh morphemic [00:47:13] uh character uh writing which meant that there was one written language [00:47:17] uh even though there were probably dozens of spoken languages called dialects but mutually unintelligible [00:47:27] so actually different languages uh and china had one written language that could be read [00:47:33] from basically 221 bc onward and that is ingenious when i was a student i was taught that was china's great [00:47:42] disadvantage the characters are so complicated uh but once uh computers came it turns out you can write [00:47:50] chinese characters faster than english in any event so even that disappeared as any kind of advantage but [00:47:58] david landis taught us that uh it was the characters that prevented uh efficient printing and and uh and books and so forth [00:48:07] i'm not so sure but in any event it did enable political unification i think linguistic difference [00:48:16] is really the most fundamental cultural difference in the world uh and barbarians literally in ancient greek of [00:48:26] course mean people who speak bah bah bah that's where the word comes from uh it was what the greeks called [00:48:32] people who didn't speak proper greek they spoke bah bah bah and they became known as barbarians for that [00:48:40] and um if you can speak with others uh you can get along with them you can understand them you can [00:48:48] communicate you can negotiate if you don't speak the language you have to fight them they're obviously an [00:48:53] they're always an enemy and i think that this is china's great advantage it raised the question for [00:49:00] me why not india uh unification because india also is a geographic unit uh it is bounded in the north by the [00:49:09] himalayas um but uh it never succeeded in unity the same way and the standard explanation is twofold uh one [00:49:21] is that while there's protection from the north from the northwest china india is open to invasion [00:49:28] so all of india's invasions came from the khyber pass came from persia came and it was not so hard to [00:49:34] conquer india because there was one big open gap but china had the same it had the steps and it was conquered [00:49:43] repeatedly from the north geographically india is really two very distinct parts [00:49:51] there's the indogangetic plain and the deccan plateau and these never intercommunicated so [00:49:57] unifying the deccan in the south and the indogangetic plain only occurred very rarely in indian history [00:50:08] it occurred with the moguls it occurred with the british it occurs today it occurred briefly [00:50:13] with the mauryan ashoka but other than that no and of course the diversity was not overcome by any [00:50:22] linguistic uh trick uh or device uh not only did india have all the multiple languages it has so many scripts [00:50:31] uh that it was the opposite of one common written language it was multiple scripts multiple languages [00:50:39] multiple diversity and never unity so to my mind this is actually quite important to understand [00:50:47] and china's role in the world is unique of all countries in the scale phenomenon also china's so big it never [00:50:57] went out really to beat up the rest of the world so i just want to add that china was never out for world [00:51:04] empire though it could easily have conquered much of the rest of uh of the south china seas and south asia [00:51:14] or uh um the islands of southeast asia and so forth but uh when jung he can he wanted tribute he didn't want [00:51:24] empire uh and so i think that this is also a a unique feature so let me uh just go to the final point [00:51:35] where is the world center of gravity uh and um danny asked this question in 2011 and pointed out that the [00:51:45] world center of gravity has moved significantly in uh modern times from europe eastward to asia [00:51:58] this turns out to be a fascinating methodological issue how do you measure uh a center of gravity [00:52:06] on a sphere or in a sphere um and what danny did if i'm correct is a a kind of chordal uh center of [00:52:18] gravity which means that you connect points through the earth uh and you take the weighted sum by gdp [00:52:26] of points through the earth and you find out that the center of gravity is somewhere inside the earth [00:52:32] and then there's a debate well how do you project from inside the earth to outside the earth [00:52:38] and danny kept the longitude projection and then made a a projection of meridian i'm sorry of [00:52:46] latitude as well i tried a different approach which is to say that you don't have a solid sphere [00:52:55] but you have you don't have a ball you have a surface and so i asked a different question which is what [00:53:03] point on the earth is closest to the gdp of the rest of the world and the way you can do that is [00:53:14] two different ways the most immediate way is to take every point on the planet and look at its distance to [00:53:23] all other points of course you divide the sphere not into points but into pixels basically uh into [00:53:30] one degree by one degree uh or some refinement put the gdp in each of those cells measure the distance [00:53:39] from cell to cell on the geodesic so the shortest route which is the geodesic line and then take a [00:53:47] weighted average by the gdp of each of the other points and that is not going into the earth it's [00:53:55] just staying on the surface of the earth and it's called the median value of a sphere so it's a median [00:54:04] value on a surface which i think is the natural way to do this because trade doesn't go through [00:54:10] uh the earth that stays on the surface of the earth you can refine that actually by asking not what is [00:54:17] the geodesic distance from point a to point b but what is the economic distance from point a to point b [00:54:26] and to do that you can say that sea travel is x percent of land travel or land travel is y percent faster than [00:54:38] sea travel so you have to come up with the weight of how much by sea how much by land and i experimented with [00:54:46] that weighting and took a relative uh cost of land travel of 1.4 to one which is a compromise because [00:54:59] sea travel is much less expensive than land travel but land travel is faster than sea travel so if [00:55:05] it's high value goods that you need to get to market quickly better to go by land if it can take three or [00:55:12] four weeks go by sea i took a weighted average uh and it's known in the literature as the weber uh weber [00:55:24] centroid because actually i didn't know this but alfred weber was a great uh geographer but i didn't realize [00:55:32] he was the younger brother of max weber uh and so uh he max measured distance to protestantism uh and his uh [00:55:41] his uh brother younger brother measured uh distance uh to uh um other parts of the world well in any event [00:55:49] here is my calculation uh that is a little hard to read i'm sorry uh but one ce starts uh roughly in [00:56:01] india uh by this account and in 1820 it's still pretty much squarely and uh it's it's right in in china [00:56:10] india and then is the decisive shift to asia uh which is what danny documented uh in 1913 you're into [00:56:19] western europe by 1950 you're in london basically uh and then uh you get a quick reversion back to [00:56:30] some place uh in central asia in 2026 and it starts swinging south according to my projections because [00:56:41] of the rise of africa that i project for the rest of the 21st century africa is going to be a third of [00:56:50] the world population of the world population by 2100 and if convergence holds it's going to be 20 to 30 [00:56:57] percent of world gdp this is a first in history i think it's quite likely actually and that means that [00:57:04] we get that final turning down towards africa [00:57:19] i don't remember oh let me show one more thing sorry this is giving different weights [00:57:27] to uh c versus land trade so lambda is the is the relative uh parameter for the increased cost of [00:57:37] going by land if lambda is equal to one it's almost like using the geodesic what's the shortest distance [00:57:46] although in my mapping i don't allow you to go through the pole so i i block off the pole because [00:57:53] of ice but other than that uh it's like uh purely the geodesic uh that's uh the middle volga river [00:58:04] as you go with a higher uh cost of overland you go towards the sea uh in the center of gravity yeah [00:58:13] sorry i'll just finish up so uh you get to the gulf of aden uh if the cost of sea travel is much less [00:58:22] than the cost of land travel i just wanted to say china's also converged now in innovation with the [00:58:31] united states this is of course the big development of the last 20 years there's no technological advantage [00:58:38] of the united states anymore i would argue that both are basically peers in technology at this point [00:58:46] there's no decisive advantage of one versus the other uh china has 24 of the world's top innovation [00:58:55] clusters according to the un the united states has 22 of the world's innovation clusters according to [00:59:02] uh the 2025 uh un account i'm going to skip all of that i'm going to skip that just to point one last [00:59:12] thing china is not going to rule the world okay in fact the share of china in the world gdp will remain [00:59:22] around 20 percent of gdp and will probably decline a little bit beyond that and that's because of [00:59:30] demography china is in the middle of a huge demographic transition whether it sustains is a question right [00:59:40] but as you know china's population is very likely to be under one billion by 2100 and by the u.n's medium [00:59:50] forecast under 800 million by 2100 india will be twice as large as china according to the u.n uh forecast [01:00:01] if india remains successful and unified it will surely be the number one economy of the world within the next [01:00:08] 30 or 40 years but no country is going to be hegemon uh there's no way in my view in the 21st century [01:00:19] that any one place gets a lock hold or a choke hold on the rest of the world uh the world is too skilled [01:00:30] too diverse technology flows too fast knowledge is too dispersed for any region to do what [01:00:38] europe did in the 19th century i don't believe in any choke holds left in in the world and so if you [01:00:47] just use a convergence projection for the world asia's share of the world peaks at 50 percent and declines [01:00:55] to under 50 percent by the end of the 21st century because the population for the first time becomes less [01:01:02] less than half africa is the big story demographically in the world of course uh if uh africa fails to [01:01:14] achieve economic development we have a mega global humanitarian uh and migration crisis if africa achieves [01:01:25] convergence uh in the 21st century which i believe is absolutely possible we will have a new entrant uh to [01:01:35] the world stage for the first time in many millennia in fact and uh my main uh emphasis to africa is truly be a [01:01:49] union uh that way you will gain convergence uh and be friends with asia thank you [01:02:03] uh for example with climate change different impacts on different parts of the world um arctic there's going [01:02:23] to be a new trading route right so all of those changes um is going to be uh basically arguing that we are [01:02:31] looking at on the sample thank you i will take the second question anybody yes please [01:02:47] yeah well thank you very much for this brilliant lecture and i'm impressed and one question china and india [01:02:57] loves to be the center of the world uh i think because of the industrial revolution as you mentioned [01:03:06] now we have a fourth industrial revolution and what will be the impact of fourth industrial revolution [01:03:13] in asia and in other parts of the world well this accelerate the uh pace of recovery to the center of the world [01:03:23] for asians will this will deter asians to come back to the center of the world thank you [01:03:37] and i would like to know because i'm from indonesia indonesia has huge investment on infrastructure as well as for [01:03:54] digitalization around the world and what is your projection for indonesia in 2013-2100 [01:04:04] and thank you thank you last question please yes thank you very much thank you very much for your very [01:04:19] insightful presentations uh in my uh teaching undergraduate i'm used i used to apply the financial [01:04:26] the information to pay the interpretation of the application of the institutional rule setting for [01:04:32] the inclusiveness of both economic and political institutions institutions but the today's argument is [01:04:39] very very different from the arsenal movements i'd be very grateful if you could kindly share the [01:04:45] implications of uh asmogos arguments thank you so i think you'll just take these four questions in the interest of [01:04:54] time and uh uh we would like to discuss thank you wonderful uh really wonderful questions on climate change [01:05:06] i think we should view this in three issues very briefly one is that we are on a trend where we will be at [01:05:17] uh two point something degrees celsius above pre-industrial within the next 30 years uh this is inevitable [01:05:27] and uh that will create lots of damage uh and lots of harms that's number one number two is the potential of [01:05:36] truly uh this is truly uh not linearities in the earth's physical system tipping points so we could have [01:05:47] a multi-meter rise of sea level uh with a fairly high probability in the next hundred years because the [01:05:55] west antarctic ice sheet breaks that's the second consideration the third consideration is the technological response [01:06:04] of both the mitigation and the adaptation to these changes so i think uh this means that the answer to [01:06:15] the question is that there's a lot of uncertainty and a lot of range of outcomes that are possible [01:06:23] broadly speaking we could dramatically mitigate the human induced impacts if we choose to do so [01:06:33] and if we do choose to do so china will be at the center of the solutions for the next quarter century [01:06:40] at least because if you look at any part of the green economy china dominates whether it's renewable energy [01:06:50] whether it's electric vehicles battery supply chains digital grid nobody competes with china on any of this [01:06:58] this is why i advocate in china a greatly expanded belt road program for example because i view that as the [01:07:05] great transformation degree in digital technology with the china staff and i think it's what the world needs [01:07:12] the u.s couldn't even do it if it had to do it because we don't produce any of these things [01:07:17] and uh so china is going to do this india asia and others will produce but china will be the core of the [01:07:26] technology for the green digital transformation for at least the next quarter century because it's already [01:07:33] there so we need to mitigate quickly uh if we do that we can also adapt but in poor places the adaptation requires a [01:07:46] massive infusion of outside financing you cannot adapt in a poor place on your own finance that isn't [01:07:55] forthcoming yet the u.s has broken the international side of that the world bank and others are absolutely [01:08:03] paralyzed because the u.s is out to end all of that uh so again china the brits have a major role to play [01:08:13] geopolitically then if there is a highly non-linear collapse then i think we're in a very unstable [01:08:23] situation because if hundreds of millions of people are affected in a devastating relatively sudden way [01:08:31] over a period of a decade or two this would mean huge uncontrolled political instability so that's all i can say [01:08:40] in terms of the fourth industrial revolution china and india can be the huge beneficiaries india's [01:08:50] fifteen to twenty years behind china china is in power with the united states on [01:08:58] ai and digital uh a little bit behind in this place a little bit ahead in this place way ahead in green and way ahead [01:09:07] in applications because china has an entirely integrated industrial ecosystem the united states does not [01:09:15] anymore uh we're dispensing with our auto industry for example it's dying except behind the tariff barrier [01:09:24] large parts of industry will disappear in the united states the way we're going right now and the u.s is [01:09:31] re-militarizing which is crazy uh the united states uh europe is doing the same thing which is absolutely [01:09:37] crazy so the fourth industrial revolution will be asia's if it takes it and asia can be a huge [01:09:45] part of that as well because all of the major chinese companies and they're brand new by the way they're [01:09:52] five or ten years old they're the world leaders they want outward investment and asian's the next door [01:09:58] neighbor and so this is the place to get the outward investment the u.s is horrified about all of this [01:10:04] don't put time into your industrial stack but do it are you kidding if you want to have the right kind [01:10:12] of economy that's the only place to go so this is uh the right uh the right answer for asian uh which was the third [01:10:23] question uh what are the projections on the negative side asian will be very hard hit by the climate shocks [01:10:33] this is a very fragile region ecologically it's a rainforest region it is a region highly vulnerable to [01:10:41] environmental shocks this is not a small matter if sea level rises five meters for a country with 17 000 [01:10:49] uh islands can you imagine the consequences of this so this is very serious uh but asian's economic [01:11:01] challenge is skill levels this is the most fundamental economic challenge not singapore singapore ranks [01:11:09] number one in the world in the world on all comparative scores but if singapore could help the rest of asia [01:11:16] rank in the top 10 on scores uh this would be the key for asian's economic development it is basically the [01:11:26] limiting factor in asian is not capital it's not technology it's not your partners which will be mainly china and later india [01:11:36] it's mainly skills so educate the kids very well right now the pisa scores are at 400 they should be at 500. [01:11:46] uh this would be the biggest benefit for economic development in asia imaginable and then finally [01:11:54] i just fundamentally disagree with the thesis that book is part of a western tradition which is why are we the best [01:12:11] well we're the best because we're this we're that we're protestant we're white we're more inclusive [01:12:17] the united states is not an inclusive society by the way especially how it regards the other part of the world [01:12:27] britain you would not call it inclusive society you would call it the leading empire [01:12:32] of the period from 1800 to 19 to 1950 that's not inclusive that was absolutely militarized top to bottom [01:12:44] so i think the book is a um i think the book is a wrong interpretation of history which is a self [01:12:54] congratulation interpretation of history i we're the best let's figure out why we're the best let's give [01:13:02] ourselves nice labels we're inclusive we're wonderful my country was genocidal and slave owning and the only [01:13:12] country in the world that had to have a civil war to end slavery that's not an inclusive set of institutions [01:13:19] but by the way before slavery was ended the u.s was number one for half a day to come because it has [01:13:25] huge resources a whole continent uh it was able to exploit that with african slaves uh and to to steal the [01:13:33] land of the amerindians inclusive that's not how i would say it uh very uh determined and well [01:13:42] that's not what it's called uh health oriented no doubt uh a lot of entrepreneurial energy i wouldn't deny [01:13:48] that as well but that's not the theory uh of of that book and the book basically says china will fail [01:13:57] they're not like us well that's what proves the book wrong uh china's not going to fail uh china's going [01:14:05] to dominate and for japan and china get together this is this is a false division [01:14:17] that makes no sense at all in history at all the last time china threatened japan [01:14:27] was the year 1281 and it wasn't even china it was the mongols that was the last time in history that [01:14:37] china tried to invade japan 1281. japan should not fear china at all japan does not need the united states [01:14:48] military japan has been occupied since 1945 tell them to go home let open our breed make friends with china [01:14:58] everything will be well [01:15:04] so we believe the japanese and chinese investors are here to listen [01:15:10] anyway allow me to make the last uh question and comment which is that uh are we putting the [01:15:15] malthusian trap when you cut in way of thinking to the ground we buried it [01:15:23] yeah so uh we're still uh testing uh the malthusian hypothesis [01:15:34] malthus said in 1798 that the world population would expand if income levels were kept above subsistence [01:15:45] and in that he was right we have reached 8.3 billion people it was around 800 million people [01:15:54] that malthus wrote the principles of population so the world population has expanded roughly 10 times [01:16:02] but malthus was of course wrong on two points one point was uh he got the fertility equation wrong [01:16:12] because he assumed that fertility would just [01:16:16] remain uh high and it turned out that education women in the labor force urbanization [01:16:26] decisively changed the fertility so we're reaching the peak population [01:16:31] there will never be another doubling of the world population [01:16:35] this is for sure and the peak population could be anywhere between [01:16:40] nine and ten and a half billion people depending on uh especially on uh what happens in african fertility [01:16:48] but i would say african fertility is likely to decline faster than is projected because convergence [01:16:55] is likely to happen faster than is projected urbanization is likely to happen faster than is projected [01:17:02] so i would say we will have a peak population of maybe 9.5 billion and then start to decline [01:17:09] so this malthus got wrong second of course he didn't factor in uh that uh food production [01:17:17] could do more than arithmetic growth uh he did not uh anticipate sustained technological advance [01:17:27] so i think the malthusian proposition is false except that we are still putting into a test because there are limits [01:17:36] so that we are not going to be a test for the earth's current capacity and we're in this sense exceeding them on the current technologies [01:17:43] we cannot have a fossil fuel age continue we cannot have an extensive agriculture age continue we need dramatic changes of technology to finally put all those to rest [01:17:58] and if we we know that it's easy to model it's actually easy to do uh not easy to do it's easy to see what to do [01:18:07] uh and it's mostly politics that is holding us back these are collective action problems that's why the ministers great rationality [01:18:18] is uh really the point if you were to analyze for three hours what should be done on the climate issue [01:18:26] you would make more advanced than the last 30 cops uh the cop process is an irrational process [01:18:34] uh it is not a rational process it's not an evidence-based what do we do how do we optimize that we could do [01:18:41] together here in three hours and come up with a global plan that would be fair make sense efficient low cost [01:18:49] and actually achievable but you put 190 governments together and you put donald trump in the white house [01:18:58] good luck and that's really why maldoos still even exists as an image but let me say one more thing about maldoos which is that [01:19:13] he had a profoundly pernicious effect on the history of thought and this was in [01:19:24] he was not a nasty man by the way and in his later writings he eased up what he wrote in 1798 [01:19:33] but he reinforced the laissez-faire attitude in the middle of famine and drought and britain let [01:19:43] people die by the millions tens of millions repeatedly in the 19th century starting in ireland and then [01:19:51] repeatedly in india and into 1943 bengal famine and maldoos played a big role because these uh bureaucrats [01:20:01] and the british uh viceroys and so forth said well we know that it's counterproductive to intervene [01:20:10] in the midst of fast so he had a very pernicious effect he also was as you probably know [01:20:18] literally the inspiration for charles darwin's natural selection which is brilliant science but darwin [01:20:25] said i couldn't figure out the natural selection mechanism until i read maldoos and then i understand [01:20:33] there are always more organisms that can stay alive and that gave natural selection and it's true and so [01:20:42] this is that's a great truth theory but the idea that humanity is bound by natural selection became a [01:20:51] dominant idea from the 1860s onward social darwinism it's one of the most pernicious doctrines it was a [01:21:01] short step from there to nazism which is we need land we can't survive it's the aryan people or the slavs [01:21:10] we need to kill all the slavs and open up the way for enough land area so the mental effect [01:21:17] of darwin idea of the maldoos ideologically not the math himself but the effect was hugely hugely [01:21:26] negative and we have to overcome that ideology and the best way is to have a good quantified model [01:21:34] in front of you to say that's just wrong i'm sure we could go on and run on this subject but i think [01:21:42] uh the most important point is this from what again we need technology that's one secondly we need to make [01:21:49] we need to make babies so with that let's thank professor seggs for [01:22:02] we had just the time so what time now