Episode 147 – Mapping the Future of Humanity with Parag Khanna

Macro N Cheese – Episode 147
Mapping the Future of Humanity with Parag Khanna
November 20, 2021

 

[00:00:03.010] – Parag Khanna [intro/music]

There’s really a very long line of women from Latin America or East Asia who want to come here. Who want to take care of your kids, who want to clean your home and cook food for you at an affordable price and take that money and save it assiduously and send it back to their family. And we don’t let enough of them do it. And our alpha qualified women suffer as a result of that. And I think that’s it hideous.

[00:00:26.150] – Parag Khanna [intro/music]

Every single day, hundreds, if not thousands of people are dying. The number of climate refugees in the world is greater than any other category of refugees. Climate migration will soon exceed all other drivers of migration. And yet we don’t have a collective discourse on adaptation. We only have one on mitigation.

[00:00:58.730] – Geoff Ginter [intro/music]

Now, let’s see if we can avoid the apocalypse altogether. Here’s another episode of Macro N Cheese with your host, Steve Grumbine.

[00:01:43.250] – Steve Grumbine

Alright, this is Steve with Macro and Cheese, Folks bringing on a guest today. A friend of mine was posting to one of my posts on Twitter and I don’t normally talk Twitter here, but it was what brought me to our guest and she dropped one of his articles into my thread and it made me start thinking.

I’m keeping this intentionally vague because our guest is none other than Parag Khanna. He is absolutely a sharp mind, especially when it comes to the concept of mobility and the world around us. Maps, in particular; the geography, the movement of people throughout society both past, present and future. So, Parag Khanna is a leading global strategy adviser, world traveler, and best selling author.

 He is founder and managing partner of Future Map, a data and scenario based strategic advisory firm. Parag’s newest book is Move: The Forces Uprooting Us in 2021, which was preceded by The Future Is Asian: Commerce, Conflict and Culture in the 21st century in 2019. He’s also written a lot of other books. He’s been on a million podcasts and he’s also been teaching a lot of really great stuff about the way the map works.

So without further ado, let me bring on my guest. Parag, welcome to the show, sir.

[00:03:11.450] – Parag Khanna

Well, thank you so much, sir. Great to be with you.

[00:03:14.570] – Grumbine

I’m so excited about this interview because like I said offline, most of what we talk about here is Macroeconomics and the subjects that you cover fold nicely into the work we do here. You have written some amazing stuff and it’s particularly of interest given the pandemic and the stop of mobility that occurred instantly and then the shifting of the environment and reopening of the world economy and where this is going to all lead to.

Quite frankly, I think it’s unprecedented times. I think a lot of people are shocked at what happened. I think people are still trying to come to grips with what happened. And I think there’s some people that are pushing to make the world look very different than it does today. But climate is going to make it happen.

The changes that are occurring in our global climate are impacting the way society functions. Real resources, income inequality are driving behaviors that maybe we’ve never seen before. So your work seems very prescient today. Tell me a little bit about how you came to the subject.

[00:04:26.510] – Khanna

Well, wow, that was quite an introduction to the topic itself, because in a way, macroeconomics by its very nature touches on all of those things. So I’m glad that you are conducting such wide ranging interviews, because in a way, you should leave no stone unturned.

So for me, topics like geopolitics, mobility, geography, infrastructure, all of these things are intimately related to each other, and obviously to macroeconomics and to the kind of evolution of our global economic system, which has definitely been in a way a part and parcel of my work. If I could use only one word, the word would be globalization. Right.

And globalization is something that is simply greater and bigger than all of us. And there’s a lot of reductionist writing about globalization, I would say almost most writing about globalization is so incredibly narrow, and it’s always trying to score points and say “globalization is finished”. And now I’m old enough, sad to say, that I have heard about the death of globalization I think four times in the last couple of decades.

If you remember the 9/11 terrorist attacks, immediately people said “this is the end of globalization.” There will be no more trust between east and west, and there’s no more security and the reinsurance industry can’t support foreign investment anymore. And all of this stuff, the whole world is going to collapse. Right. You remember that. The financial crisis was not very long after that, 2008.

And of course, at this point it’s in all of your listeners memory, people said, “this is the end of globalization”. And then you had Trump and Brexit in the same year 2016. They go “well, THIS is the end of globalization”. And now you’ve got the pandemic. People say “this is the end of globalization”. So that’s four.

Are those four fair characterizations of four moments when you and I can both remember a lot of people- not like some random fringe minority where I’m just picking on a straw man, like, really a lot of people, a borderline consensus almost- that those moments were the so called end of globalization. Right? And they meant it seriously, these were not just like reflexive throwaway line. Am I mischaracterizing the situation or are we on the same page so far?

[00:06:32.390] – Grumbine

I think we’re on the same page.

[00:06:33.890] – Khanna

Well, and that page you need to rip it out of the book and crumple it up and throw it away. Please. Don’t write those words again. Don’t write those words in front of me, at least ever again. Right? Because by now you should really have learned your lesson. Globalization is bigger than you. It’s bigger than your narrow metric that you choose to…  you, I obviously don’t mean you personally.

The people who celebrate or pretend to understand globalization and then reduce all of globalization to the rate of world trade growth versus the rate of growth in the world economy. That’s a pretty narrow understanding of how things work, right? People who reduce globalization to goods, trade versus all of the other components of globalization and on and on and on.

So I’ve kind of just had enough of it. Right? Now I appreciate that we have data gaps. I appreciate that there’s lots of things in globalization, the content of globalization that are more difficult to quantify, and therefore we ignore them. But to ignore them statistically versus to ignore them intellectually.

There are two different categories of crimes, but they’re both crimes in a way, because we can do a better job of quantifying the things that are difficult, and we should do a better job of at least intellectually appreciating them, even if we can’t quantify them. So I consider myself, as a very roundabout way of saying, I have come to embrace and to be incredibly passionate about globalization and in every conceivable dimension and to continuously try and everything I write to have a holistic and systemic view of globalization and where it’s going.

Not just at the global level, but even the nuances within it. And that’s what I do. And the book Move is about one aspect of globalization, which is migration and human geography that I hadn’t yet done an entire book about. But this book is a sequel to the pre, pre book before the book that came before this, which was Connectography.

Connectography was about the functional geography of infrastructure and supply chains, which of course, has very significant bearing on macroeconomics. And we can talk about that. But basically the punchline of that book was Connectivity is destiny, right? We are building and building and building of ever greater volumes of new infrastructure that enable globalization.

We may not be using it fully at any given time, but the capacity for globalization is more extensive than obviously it’s ever been, by far. And now what I want to do with this book is to talk about how we use it as people, as human beings. How does it enable a new distribution or the evolving distribution of the human population in the world? And that’s the definition of human geography.

Where are we? And in some ways, also, what are we? Who are we? So human geography isn’t just there are 330,000,000 people in the United States and there’s 1.6 billion people in China. It’s also how mixed race are we? What’s our demographic composition, our age structure, all these kinds of things. All of that is also human geography.

And I fundamentally wanted to write about the future of human geography and answer the question, “Where will you live in 2050? 2040? 2030?” Your children, your family, all of us, all, 8 billion of us. And it’s a more important time than ever to discuss this because the world population is plateauing. Right? Let me pause for a second. Is this something that you guys have discussed before? The Plateau in the world population, the great demographic deflation that lies ahead?

[00:10:02.510] – Grumbine

We have never touched on that. So I really appreciate you taking a step through this for us.

[00:10:07.550] – Khanna

Let this be the moment. And it ties directly to the pandemic. But really, as the denouement, because global fertility began to decline from its peak in the year 1968. Believe it or not, in the 1960s, as the world population was rising and rising, and then into the 70s, the Ford administration worked together with the United Nations to start to promote family planning and contraception and female empowerment.

And all of these kinds of things that gradually helped to reduce the skyrocketing birth rate around the world. And they targeted, of course, poor developing countries with a staggeringly high birth rate because they feared the Malthusian trap of overpopulation and resource stress. The Club of Rome had published its famous report forecasting precisely this Malthusian outcome.

And at the time, the forecast- and even until the 1990s, I might add- demographers forecast that the world population might literally hit 15 or 16 billion people. But what is our world population going to top out at? Probably by the year 2040, it will probably be less than 9 billion people. So we were off by a staggering amount.

We were off by 50% of the present world population as recently as the 1990s, with the benefit of a globalized post Cold War world with access to data from everywhere in the world, we were still off massively, stupendously, in our world population predictions. So why has the world fertility decelerated?

Well it has to do with everything I described in terms of the population control measures of the 60s and 70s, urbanization, female empowerment. The urbanization part is important, and it was missed by demographers. When people move to cities, they live in cramped quarters and aren’t going to have as many kids. And it’s very expensive to live in a city and to raise a family in a city. So simple, so obvious.

But our demographic methodologies didn’t really take that into account. Now, let’s fast forward to the recent present. There have been two major baby bust events in the last 13 years. The first is the financial crisis, and the second is the pandemic. Both were baby busts, and we knew it at the time that they were happening, that they were baby busts.

We knew right away that fertility was crashing because of those events and the economic insecurity that they unleashed. Right? We knew right away in 2009, that fewer children were being born. We literally knew in the year 2009 that there are many colleges in America that will have to shut down in 2026 because they won’t have as many 17 and 18 year olds going to college. Right. So we really know what’s going on now with our demographics. Pretty cool stuff.

[00:12:52.070] – Grumbine

Right.

[00:12:53.330] – Khanna

Now we’re living through a baby bust that is far, far more severe and extended than the 2008 financial crisis, right? As it is, fertility was absolutely crashing. Young people, young millennials Gen Z are not having kids because not only is there the economic insecurity that’s been around for a decade plus since the 2000s and even earlier, but you also have the climate factor.

And young people are saying this meme circulates that if you want to make a dent in climate change, don’t have children or have one child instead of two children or no children at all. So now you have an entire generation of young people that are not having kids as the world population was already plateauing.

And hence rather than 15 billion people, probably by 2035, 2040, we’ll top out under 9 billion people. And that’s it. You will never have more human beings living on the planet Earth than less than 9 billion people that we more or less already have. Because let’s remember that even though the population of India is still growing, the population of Africa is still growing.

That has almost zero material impact on your life in America. Right? So as far as we are concerned, North America is already demographically stagnated. Europe is totally stagnated. Japan is totally stagnated. Russia has stagnated. China just had its census. Do you know how much they were off by? They had overshot their population projection and they just issued a correction.

Do you know how much they corrected it downward by how much 120,000,000 people. All this time you and I and our fellow economic journeymen have been talking about China as if it had a population 120,000,000 people larger than it actually has. Like, Oops, that’s larger than the largest European country, right by far.

So the world is already demographically deflating, effectively, other than a few parts of Africa and parts of South Asia. Other than that, that’s it. So we now have to enter an entirely new demographic and economic and geographic paradigm because instead of the past 100 years, where every generation gave birth to a much larger generation in itself.

Hence, the world population quadrupled over an 80 year period. Obviously never happened before in human history. Suddenly poof! Boom! Flatline! Right? Plateau. And we should prepare for decline.  Significant rapid decline in the world population. Again, Japan is already there. We are heading there. And without immigration and without migration, without a competition in a way to bring in young people, you’ve got to ask yourself, what is your economic future?

Who are your consumers, who are your taxpayers, who are your homeowners? Because you’re really dealing with it suddenly, as I point out. And I know this is going to be a favorite jumping off point for you for the next thing. But suddenly, economics is no longer, like, infinite. It’s no longer just the constant creation of value and finance. It’s like, man, it’s very finite.

You have a really finite number of human beings to whom to sell things and who will buy things in a very pure, traditional, classical sense of the agents in an economy. And you just don’t hear people realizing this. At the domestic level, yes. Because we look at Japan, we say, my goodness, look at Japan, headed for constant contraction, deflation and so forth. Well, guess what that has to do with its population, and the whole world is heading in that direction. So we’ve got to think about that and start to operate within those new boundaries.

[00:16:17.450] – Grumbine

Places like Scotland that would give their left arm for young kids to come and start working there. Scotland has a huge gap in terms of workers.

[00:16:27.350] – Khanna

So do we, by the way.

[00:16:29.210] – Grumbine

Yeah. But in the U.S. we’re unfortunately filled with a lot of Xenophobia. People that are terrified of this false scarcity narrative through the neoliberal era that makes people hate each other, makes people protect things that really don’t need protecting. And the idea of the United States hitting maturity going past their expiration date, so to speak and stagnating, and the fact that we don’t embrace immigrants as a means of filling that talent pool or investing even in the population.

We live in austerity culture in the United States. So many people don’t have enough to get through one week without a paycheck. People are living hand to mouth. So there are investment opportunities in the existing base of the population. There’s an incredible need to spruce up the population, so to speak and bring in some new talent. So, yeah, I’m with you.

[00:17:28.970] – Khanna

When I started writing about this plutocratic structure of the American economy and how we were becoming Second World, as I called it, which is first and third world at the same time, some people labeled me as a declinist. And the interesting thing is that there’s still plenty of reasons to be bullish on the US in particular.

But North America in general, again, looking at everything from the geographical lens as I do, which is to say that North America, and again, we can all feel quite rosy about what I’m about to say, but it’s, of course, the only geopolitically stable continent in the entire world. Right. And it’s the only continent that is closest to genuine autarky.

Not just in terms of the volume of raw materials and resources, agriculture, water and energy, because technically, South America has that, too. But it doesn’t have capacity to harness it. The capacity, the industry, the demographics, meaning just the raw number of people in North America. We’re not disappearing off the map.

We’re growing towards an eventual let’s say 450-500 million people in North America, which is almost the rough number of people that are in the European Union today. But with no geopolitical threats to our territory. Right? Which is why, in many ways, the United States, again, in particular, and North America in general, can afford to digest so many horrible, terrible mistakes. Right?

Stupid policies, bad immigration policy, mismanagement of resources, lack of quality infrastructure investment. We can muddle through longer and better further than any other part of the world. Which is not to say we should keep on testing that proposition because we have been testing it quite well recently.

But if you really take that big step back in the planetary step back, North America is actually going to be okay. It’s really remarkable that in this political culture and moment that we’re in right now with all the negativity. And again, I’m saying this as someone who’s painted as a declinist. I’m not. Right? Anyone who’s a structural or systemic thinker can’t deny what I just said about the propitiousness of North America.

So we’re the right people in the right place at the right time, still, to a very large degree. And I think that as a result of policies that actually go back to the 1970s going back to the oil shocks and the response to the 1973 oil shocks. Which is to say, Nixon investing in the creation of the Strategic Petroleum Reserve and what that did to America’s energy industry and so on.

And then, of course, what’s happening today with not pulling up the drawbridge, but rather focusing on domesticating, nearshoring supply chains, focusing on domestic manufacturing in all of these areas, we are actually working very hard to make good on that capacity for self-sufficiency in North America that we have. That again, no other region of the world has.

So I actually think that the needle that we need to thread is not really so, so tiny and impossible. Not at all. It’s quite plausible that we will thread that needle, actually. So I’m a relative optimist about North America, even though we keep screwing up. And if you look at immigration, by the way, the trend line in terms of the gap between the United States intake of migrants versus the rest of the world has shrunk to almost zero.

So we don’t take in as many more as other developed countries put together as we used to, but we can, and we’re moving in that direction. If you look at some of Joe Biden’s moves or attempts in terms of the pathway to citizenship, undocumented migrants more than 10 million, the H1B visa reform to increase the quota and to allow spouses to work that’s seismic stuff.

These are just line items in a bill that people don’t pay attention to, but they are a really big deal, because when you tell would be H-1B visa applicants that not only will they get to work, but now they can be a two income household, people will make a beeline for America again. Right? Because that’s a really big deal, because that means you can really live well in this country.

Then there’s Canada. And remember that you say Trump, I say Trudeau, you know it’s like and he’s outlasted Trump. And I’m sure he is very grateful for that. They just had an election, and they have the most pound for pound generous immigration policy in the world today, 400,000 targeted new immigrants every single year, all with some pathway to citizenship, literally all of them.

Your citizenship journey begins the day your plane lands. They’re targeting young people from all over the world. It’s a lot of skilled migrants. They’re even targeting of course Americans or immigrants in America who are looking at some kind of exit. Right? So Canada is doing a lot of things right. And we will probably learn from them as we lose talent to them in some ways.

And you’re going to have a bit of a self correction. And of course, we need it demographically. And this is one of my favorite lines that-I’m so lucky-I sort of picked up while Googling something else a few years ago, when I was writing this book. It was Mick Mulvaney when he was head of the OMB or when he was chief of staff in the White House or whatever number of hat he was wearing.

Maybe he was at the same time. I can’t remember. But do you remember this line? He said, and this was picked up off Mike at some fundraiser. He said, we are desperate, desperate, desperate for more people. And he used the word desperate three times. It’s in quotes in the Washington Post. If I’m not mistaken, look it up.

So I quote that in the book. I’m like if Trump’s senior most guy is saying at the height of his administration, we’re desperate for more people and the American economy will be $1 trillion smaller in the year 2030. If we don’t have mass migration, that’s the data talking. That’s the underlying data. We know how much the average person consumes and contributes to the economy over the course of their lifetime in the United States. Right?

Over one lifespan. And we know what is going to happen if that number literally declines, which is where things have been going and the pandemic has suspended so much important immigration. So I think that believe it or not, there is a stronger economic consensus on immigration than there is a cultural consensus.

And maybe if we could separate those two out, we could have a more rational conversation and win over some of the cultural naysayers. And I use the example of Germany where you have genuine population stagnation and decline. And if you look at the same districts and provinces where the far right parties, the AFD in this case, in Germany, or anti immigrant have won and prevailed.

It’s a similar demographic to the kind of rural white old voter in America. And what I say to them is you’re going to die alone or if you’re younger, your parents are going to die alone. Do you consider yourself a civilized, dignified society? Your parents die alone because you didn’t let in the caregivers to take care of them. This is happening all over the world, in Italy, in France, even maybe in America, certainly in Japan, old people die alone in their homes, and it’s weeks before someone stumbles upon them.

[00:24:41.690] – Grumbine

Horrible.

[00:24:42.590] – Khanna

Yeah, that’s horrible. And that’s a fact. I’m not a macabre guy. I’m stating it’s because it’s a fact. And I don’t think that you’re a civilized country. If you treat your elderly like that. Now let’s take something really live. Let’s talk about the motherhood penalty, which I’m sure you have spoken about. And this is something I’m also passionate about.

The role of women in the workforce. The ascent of women in the corporate hierarchy has suffered, according to all the reporting that you and I are both reading every day in our newspapers, a multi decade setback as a result of this pandemic. Women having to bear the brunt of childcare and all of these pandemic related issues and caring for the elderly, caring for their kids, potentially having been divorced.

It’s just too much you can’t handle it. Well, I’ve got a one word solution to that: it’s called immigration. Because there’s really a very long line of women from Latin America or East Asia who want to come here. We want to take care of your kids, who want to clean your home and cook food for you at an affordable price and take that money and save it assiduously and send it back to their families.

And we don’t let enough of them do it, and our alpha qualified women suffer as a result of that. And I think that’s hideous. Because I’m speaking to you from Singapore on the other side of the world, and in this country no working woman has to make that false choice. We look at ourselves as being better than everyone.

But come on, there are these expat cities or these cities in Asia, and elsewhere in the world where women are professional educated every bit or more so, quite frankly, on average, than American women. And they have the nannies, cooks, cleaners, drivers, maids and so forth. So they never miss a day of work.

They don’t have to miss whether Zoom calls or executive meetings or business trips around the world. They don’t have to make that choice because they are proximate to- and so are we, so that’s not an excuse- proximate to the labor force that wants to do those jobs, and they don’t view it somehow as some kind of concession.

So I think that we need to grow up in this regard. We’re hurting ourselves, our elderly, our working mothers. Society as a whole is not going to be better off if we don’t maintain the demographic balance and the demographic balance means not just how many people do you have 330,000,000 people? Wow, that’s a lot of people. Well, no, it’s how many young people do you have.

At the end of the day, the entire future- and actually, this is what the punchline of Move is- it’s the war for young talent. Right? In one sentence, the winners and losers of the 21st century are the countries that attract young people. And you can just see young people voting with their feet and you can literally predict, I think this is such a prosaic thing.

We don’t have to get into complex econometrics here. The winning society of the 21st century are those that attract young people right now and tomorrow. End of story open and shut my entire book in one sentence. But please still read it.

[00:27:24.890] – Grumbine

Let me ask you this question because there’s three or four things I want to parse out of there. The global north has made de facto slaves of the global south, whether it be resource extraction, absolutely deleterious economic sanctions and IMF bad deals to extract from these economies. And the global north has naturally kept growing and advancing their position in this global hierarchy.

And as we bring people up from the south and we let them do these service based jobs, this is maybe what they’re called to do. This may just be a snapshot in time of where we are, but I often think, is that really what we’re gunning for? And I think about the equality or the inequality baked into this global north global south debate and the concept of degrowth, which we talked a little bit about offline with Jason Hickel, which I know you mentioned in your book.

I am interested in understanding the combination of the global inequality that has been baked into the North South divide, but also the imperialism that has driven much of the US’s foreign policy for the last half a century. I’m curious what your thoughts are on the impacts as to those young kids and then migrating to wherever the good opportunity is.

It seems like the inequality is baked in from the imperialism which is baked into the continual advancement of the global north. It’s not even comparable how vastly different the north and the south are. Based on what you just described, how does that marry up with this?

[00:29:07.670] – Khanna

So here’s the thing. It is useful to look back at history, at imperialism, at the North South divide, at economic and geopolitical hierarchy and exploitation as part of the construct or structure of previous eras and the persistence of some of those structural conditions or the legacies of those practices today is part of explaining why the world remains so unequal.

But, to do so, I think, would be incomplete because it doesn’t quite capture how you also simultaneously have the emergence of this more interconnected and integrated global economy today, in which there is slightly more fluidity in the global vision of labor that no longer looks exactly like a North South divided hierarchy in the rigid way that has been before.

So I’m kind of calling for a bit of incremental evolution on how we understand the kind of complexity of the world economy rather than simply maintaining those frames that are not inaccurate about the past but may not be as useful in the future. Now. One example, one data point in this regard would obviously be the fact that prior to the Pandemic, you did have a decline in North South inequality, a gradual decline because you had large scale poverty alleviation particularly in Asia.

Rising incomes. You can’t really refer to China as a developing economy, given what its mean income is. Median income is obviously lower, but most Chinese people enjoy, let’s say, basic decent quality of life irrespective of what their per capita incomes are. And obviously because you’re talking about so many people, it’s not that it’s going to be necessarily a very high income level anytime soon, but still they’ve built a decent quality of life.

So you can’t really refer to China as the global south and so forth. Sure, the other reason why I think we have to have a kind of holistic view is because the movement of people from south to north could be viewed on the one hand, in that old style model as extractive. Right? Extractive brain drain.

But on the other hand, when you view things through the lens of the now inevitable reality of climate change and this broader, in a way, repatterning of the world into livable and unlivable areas because of climate change, you would almost want to accelerate that brain drain in the sense that you literally have to bring about a large scale resettlement of much of the world population from south to north, because the south, yet again, tragically, is the most adversely affected by climate change.

And because much of climate change and certainly the negative effects of climate change in the short and medium term, perhaps in the long term, are irreversible. You couldn’t possibly, on the one hand, want to reduce that North South inequality and actually believe that that will be achieved with the people of the south staying where they are.

Those are literally irreconcilable propositions. You cannot pretend that the people that you’re going to raise incomes in Nigeria or in Congo or even in India, quite frankly, to such an extent, given the climate conditions that those countries face. If you are a solidarist, if you believe in solidarity, you would literally have to want a mass relocation from south to north.

Now you can view that either as there goes the north winning again, cherry picking the best and the brightest of the skilled labor force in the south and leaving the rest to rot and wither. Or you can say these are the baseline conditions that climate change has brought about, and we know who the guilty parties are, but the only fair response to it if you genuinely care about not just inequality between geographies, but inequality among people- and again, that finite number of people that are left in this world- the only rational response if you actually care to do something about it, is to relocate those people.

Because almost every single one of them would be better off in the north than in the south. So that’s part of my moral message in this book. Because the one thing that we could do to tackle our own labor shortages and to replenish our demographics and to adapt the human species to climate change- if you want a triple silver bullet like all at once- it is mass migration and mass resettlement of the human population from unlivable to livable places. That’s the open and shut case. As far as I’m concerned.

[00:33:43.810] – Grumbine

And, that’s very powerful.

[00:33:58.290] – Intermission

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[00:34:47.390] – Grumbine

In the Middle East, India and Pakistan are not exactly what we would call best friends and very easy to see climate migration creating the next wars. If we don’t do something differently, these groups that have a cultural or a geopolitical hatred for one another, there’s conflict there. What are your thoughts about that kind of conflict rising without some sort of a plan for how to handle it?

[00:35:20.930] – Khanna

Well, we don’t have a collective plan for how to reconcile the geography of resources, borders, infrastructure, and people. And these are the four layers of geography that comprise the kind of foundation of this book. Again, resources, borders, infrastructure, and people.

Those are the four layers of geography. It’s human geography, functional geography, political geography, and natural geography. And there is no grand plan for how to bring those into a more sensible harmony. Right now, we have resources abundant in places where there are no people, and we have people jam packed in places where there’s scarce resources.

And young people are listless and unproductive, whereas they could be relocated to places where their labor is actually needed and will be better compensated. Right? So those are those mismatches. And there isn’t from the United Nations or from Joe Biden or from anyone, one vision for how to fix that. That’s basically why I wrote this book from a geographical point of view, is to reconcile these geographies because we have to do it in a bottom up kind of way.

If we succeed, it will be because Canada brought in even more than 400,000 migrants a year in America and back to mass migration and again, correcting our demographic deficiencies and our labor shortages while also helping the world population adapt to climate change. It’s again, a silver bullet, if you will. And it’ll be because Europe started to absorb lots more Africans, Arabs and Asians.

And Russia and Kazakhstan. I have chapters about every one of these countries in the book, and whether or not they’re ready for this or what it would mean, what it would look like some examples about what’s happening. But places like Russia and Kazakhstan become home to millions, if not billions more people from South Asia, Southeast Asia, and so forth.

Because if you look at the climate models, as you rightly pointed out, they are not kind to these regions of the world. So you will have water wars and resource conflicts along the way to some degree. Again, that’s already been happening if you think about East Africa and elsewhere. But you will also have seminal changes in policies of countries as they realize that they are in this war for talent. Right?

And you’ve seen this in Germany, and eventually you actually see it in Kazakhstan, a very fast growing country. You see it in Canada. So I think that I am fully confident that there will be a truly global war for young talent for young manpower, and some countries are already engaged in it. So the only question that remains, then, is whether your country, wherever you are, has realized it or not.

That’s the only question. Because again, the law of the future, as I stated it, is that the winners and losers are determined by young people voting with their feet. Again, the only question is, have you realized that you’re in this game yet, or have you not realized it?

[00:38:28.010] – Grumbine

 Right. The most recent COP26 work, you’ve said it’s woefully nowhere near enough to address the situation we’re under. What is your assessment of actual climate change and the real life impacts? It’s no longer something in the future. You’ve talked about, where are you going to live in 2050? Some of your best stuff is predicting the mobility of people on a scale of one to ten. Where are we in the Holy you-know-what moment?

[00:39:02.750] – Khanna

Well, there is a bit of the question of what do you mean by we, right? Because even climate change, which is next to the global economy, is the two things that most people, perhaps anywhere, would perceive or agree are global in nature. People realize that there’s an interconnected global economy. The price of goods is affected in one place by phenomena elsewhere.

And of course, that we have our exchangeable currencies and all these kinds of things. People sort of get that. And then they also get it when it comes to the climate. But much like the economy also, it’s not all in psychologically because they’re differentiated impacts around the world. So like Canada and Russia don’t really have to care about reducing their own emissions as much as other countries, or about the collective reduction or agenda around emissions reduction, because in the end, compared to the rest of the world, they’re winners from climate change.

As of this year, Russia is the world’s largest wheat producer. So agriculture is booming, the economy is diversifying. China is investing a lot in their infrastructure. They’re depopulating, for sure. But climate change is helping them become a player again, in a significant way, in ways that would not have been the case if not for climate change.

So you’re not going to have collective action is what I’m saying, right? But because climate change is so much more extreme and occurring at a much faster pace than we previously acknowledged, it means that adaptation is as important as mitigation. And this is a huge theme in the book, and quite frankly, an open door, a big hole that I’m trying to drive a truck through because I’m beside myself with rage. T

hat COP 26 and all of these summits and all of our hoi polloi are focused entirely on mitigation, which is basically the virtue signaling of likely unenforceable and non implemented promises on emissions reduction, while the accumulated emissions in our atmosphere are enough to damn us for the next decades, even if emissions drop to zero today.

So we’re focused on this virtue signaling around being net zero by 2060, by which one will literally all be dead. And instead, we should be focused not just on this mitigation, and again, just to reinforce I believe we need to do much more on mitigation. I believe in the Manhattan projects. I would even go so far as to support certain geoengineering measures, which is a very provocative thing.

But since I wrote an essay about it for Wired, it’s not a new thing I’m revealing. I think we’re going to have to try technology because again, we have a collective action problem because we’re lazy and not coordinated. Agreed, we have to rely on technology, even if we don’t want to be branded as solutionists. Anyway,  so I want to do all of those things.

But climate adaptation doesn’t get nearly enough attention. Apparently, 6% of climate related funding goes to adaptation. Meanwhile, people are dying every single day. You got your rising sea levels in Bangladesh and people dying in floods and heat waves and droughts and cyclones. All these climate related phenomena every single day, hundreds, if not thousands of people are dying.

The number of climate refugees in the world is greater than any other category of refugees. Climate migration will soon exceed all other drivers of migration. And yet we don’t have a collective discourse on adaptation. We only have one on mitigation, and I obviously think that’s something of a grave oversight.

So to me, you need to have the thing that you and I agree we don’t have, which is some kind of common action. But there will be countries that will step up and they’ll say, “Wait a minute, we could use a few more hands around here anyway, because Russia is, like I said, an agro superpower and has very few people”. It’s xenophobic and racist, but a future Russian government will probably be less so.

And I document this in the book, I’ve spent a lot of time in Russia, driven across Russia, interviewed officials everywhere. And everywhere but the Kremlin, you actually hear Russians say- and the further south and east you go in Russia, the more you hear people say- and by people, I also mean important people, bureaucrats, decision makers, administrators functionaries and so forth- they say we need more farmers, we need construction workers, we need people with factory skills, we need pipeline operators, we need all these kinds of immigrants.

And we may not like them culturally, we’re certainly not like them anyway, but we need them. And we should even start teaching in English in our school so that we can attract more of them to come and work here and stay here, because otherwise we’ll never fulfill our grand economic plans for ourselves. So that’s what you hear, actually on the ground in a place like Russia.

And again, it’s important because it’s a climate propitious geography, and that’s what’s happening in Germany. You can see it in their election results, and you can see it in their economic growth, on the back of absorbing and integrating and training legions of new migrants. So I do think that we are going to have that change come about as a response to the twin phenomena of demographics and climate change.

So it’s the push and the pull. Climate change is pushing people demographics is pulling them. And if we can leverage ride those two waves to self correct, we will have adapted a large share of the world population to climate change and alleviated our labor shortages and built more civilized societies and obviously brought about something of a culture of global solidarity which is lacking today.

And I think that’s a top down issue that we’re talking about right now. There’ll be bottom up solutions, bottom up examples, bottom up role models, the Canadas and Germanys of the world. But they will point towards what everyone needs to do for us to collectively escape. Because remember that even if you do put up those walls and barriers and you say, “okay, great. Well, at least Fortress North America is going to be fine”.

Well, not quite, because we will experience that demographic and economic deflation and insufficient globalization will hurt our exports, our firms, which will further reduce our job creation. So there is a downward spiral to not having the appropriate balance and harmony among these different forces, even if they’re complex to understand.

[00:45:34.970] – Grumbine

Let me ask you this question. Your one sentence book. How do we get the kids here, right? With intellectual property and the extraordinary, uneven distribution of Covid relief, vaccines and other treatments, how do we balance the needs of society in this future world as we look at adaptation and the migrations, how do we deal with that in the future?

It seems like intellectual property is a really big deal, especially in this digital age. And as we’re going into almost, I don’t want to call it a post sovereignty moment, but borders are blurring. How do we deal with that?

[00:46:15.410] – Khanna

On the one hand if you just take the specific example of vaccines, it’s obviously incredibly frustrating because I think you and I probably remember roughly this point last year, people were saying, what are we going to do with all those grounded planes?

People aren’t traveling. Oh, I know. Let’s start to load them up. Every plane in the world is going to be needed for a massive airlift of pallets of vaccines to vaccinate the world. Wow, that’s a pretty powerful progressive rhetoric. Do you remember that?

[00:46:43.010] – Grumbine

I do.

[00:46:44.150] – Khanna

I was inspired. I was inspired. I was like, really are all the world’s Airlines really going to be mobilized? The energy companies will donate the jet fuel, and the planes will donate the pilots and the cargo worker and the pharmaceutical companies are going to have the vaccines ready. Billions of doses.

They’re going to be flown to airports all over the developing world. The global south. We’re going to do this! Here we are a year later and probably feel stupid ever having felt that because you had the Pharma company saying, let’s keep negotiating on price.

Let’s starve COVAX, and you have people just looking the other way and saying, oh, guess what? Tourism is reopening and your flights to Canada are open. Let’s go. And of course, the Airlines are saying, My God, we’re completely decimated financially and are sitting on obscene mountains of debt. If we don’t get flying again domestically and Jack up airfares and business class, we’re in big trouble.

And that global agenda, that solidarity is falling by the wayside. And the lesson learned again, in the spirit of what we were saying earlier about modifying or evolving our frame, the south has learned its lesson yet again. No one is going to care for them but themselves. And you’re going to see a few things happen.

Look at India. They’re saying, you know what? Look at the crisis of oxygen supply in their hospitals. Like, wait a minute. We’re going to start manufacturing this and have those tanks ready ourselves. Right. Vaccines. They’ve got big generic manufacturers. We are going to do this ourselves and become a vaccine superpower and make sure that we are the ones who deploy and sell, competing with the Chinese and the Russians into those emerging markets that the western Pharmaceuticals don’t care about so history won’t repeat itself in the intellectual property space.

When you have a crisis, you also have lessons from the crisis and you overcompensate in some ways. So again, look at global energy. After the oil shocks of 1973, huge investments were made in exploring hydrocarbon energy discoveries, of course, accelerated global warming. But you would now have hydrocarbon abundance. There’s enough oil and gas to last a long time.

Remember all those books about peak oil? Well, those are kind of wrong. So we’re not at peak oil supply. We’re more like peak oil demand. So lots of complex factors intervene and dilute the picture of a monopolistic world, whether it’s IT or resources or other sorts of things. So I think that you will have now a distribution of capacity.

And that’s really the bigger story in the world right now is that North America, Europe, even some Arab countries, definitely South Asia, definitely East Asian countries. This is a world now of many distributed significant, stable anchors of production. Production of material goods, intellectual goods, digital goods. It’s happening everywhere. Look at like semiconductors. Lesson learned. Don’t depend only on Taiwan.

They could have a water shortage and earthquake. There’s geopolitical risk. Instead, let’s start making semiconductors everywhere so that no one can hold them hostage. And you’re not going to have these bottlenecks that then cripple automobile manufacturing and other products. So the lesson from every crisis is to invest in supply diversification.

And in doing so, you create a more resilient world because if one place goes offline, you’re able to deliver from elsewhere. And that’s what’s happening in energy markets. That’s what will happen in technology. Huawei, take the geopolitical example of 5G. Huawei didn’t invent 5G. An international western lead consortium invented 5G.

But Huawei ran ahead with it because no one was concerned about it from a geopolitical standpoint. And because China does things faster and cheaper, they wound up with 36% market share. But not because by divine right, and not because it has to be. Simply because we let them. And now you can also stop them.

And that’s what’s happened over the last four years. Now, China’s Huawei market share in 5G telecom equipment has dropped to below 20%. That’s practically overnight in chronological terms. And now there’s a global competition, an arms race to be the supplier of 5G around the world. And you can see this with rare Earth minerals.

China is the largest excavator and processor of rare Earth minerals. Not because it has all the rare Earth minerals. There are rare Earth minerals everywhere. Canada, America, Argentina, France, Africa, Russia, Mongolia, Japan, Australia. There’s rare Earth minerals everywhere. And the second, China decided ten years ago that it was going to embargo, block the export of rare Earth minerals to Japan over a fishing dispute.

That was the wake up call. And it was like, boom, we’re not going to trust the Chinese anymore. Let’s go start doing our own rare Earth mineral extraction processing. So a whole consortium has been born. And you’ll see, 5-10 years from now, China’s market share will decrease. So that’s the way the world system kind of works. Right.

Step by step, incremental diversification of the toolkit, the manufacturing, the production toolkit. And now 3D printing and advanced manufacturing are going to accelerate all of that as well. Digitization and so forth. You see a lot more investment in agricultural productivity given the droughts that are afflicting much of the world. And you said, where are we in this moment or where are we going?

Just remember food production, right? We don’t have a stable geography of food production anymore. America, Brazil, China, India, and Australia have been the five largest food producers historically, but that’s not going to be the case if you think about the mega drought that we’re in, that Brazil is experiencing and Australia too, and India as well and China.

So now Canada and Russia, as I mentioned earlier, are becoming two of the world’s largest food producers. In some categories they already are. But broadly speaking, there’s going to be a renaissance of investment, both in traditional farming techniques as well as in, of course, very high tech farming, whether it’s industrial or whether it’s hydroponic aquaponic, food production technologies.

And those are going to revolutionize that industry, too. So the overall trend is entropy in a lot of these, which, again, is why I don’t stick necessarily to the North/South, first world/third world core/periphery divide. And this brings us to Jason’s work on sustainable development. The key in this chaotic world, even if you can be confident in distributed supply of critical goods and commodities and services, is that there is a bias now towards the local.

How can we localize things and become more circular and circularity in the circular economy is a big theme for me in this book, because I’m saying that this is obviously part of the key to climate adaptation is to ensure that you have greater local resilience, and you can do so through technological tools. What Jason does  is index, is to say, let’s look at the places not just in terms of the sustainability investments they make, but rather how endogenously self sufficient are they?

What is their capacity to meet their needs within the resources at their own disposal and have an adequate quality of life with relatively low environmental externalities? And when you do these indices around sustainable prosperity then Norway and Sweden and Finland and Denmark and Iceland are like always the top five.

But when you look at it through Jason’s lens, because those countries are very dirty in terms of their global supply chain footprint and their hydrocarbon industries mining in Sweden, oil and gas in Norway, they rank like 130-140. And the societies that come out at the top of the sustainable development decks are places like Cuba and Costa Rica and Panama and Albania and Vietnam and certain other places.

And if you go to those countries where you get a sense of is okay, these are places that are trying to live within their means, live within the political borders that constrain them, or perhaps their regional economic environment. And I think that’s what we should all be striving for, because then we’d massively reduce the far flung global supply chains for food and goods and commodities and all of the consumption and emissions that comes with it.

[00:55:06.050] – Grumbine

One of the things you’ve brought up multiple times, and this is a term within the modern monetary theory community we’ve been pushing out there little by little. And that is capacity. How do you measure capacity? Automation, industrialization connectivity, the technologies, the real people, the access to real resources? How do you measure capacity?

[00:55:29.810] – Khanna

Well, capacity could be, on the one hand, latent in the sense that this is the stock of resources that a country nominally possesses within its borders. Or it could be actual. Have you converted those resources into reserves. And that’s the difference between resources and reserves, reserves, or that which you finally extracted and quantified and have available for your actual utilization.

So capacity, to some degree is not only that latent quantification, but your… the two part, in a way, double meaning. What is your ability to do something with it? And then it’s not just resources, obviously, but your human capital, your technological capital as well, and all other forms of capital, industrial and so forth. All of those are part of capacity.

And then there’s the institutional measurement of capacity, which is, of course, do you have the practices, the organizational wherewithal, whether it’s the public or the private sector, to make the most of all of those other resources and capacities and capital that you have. That would be kind of a formal and overarching way to approach the issue of capacity.

And I think again, part and parcel of this regionalism and of this trend towards the home bias, if you will, and domesticating supply chains and so forth, is that we need to do a better job of harnessing our capacity. And again, I support that because I think it’s part of something of a deeper response to complexity. And that is the grand challenge, if you will.

As you know, from the literature around the rise and decline of civilizations, societies collapse when their brittleness is exposed by their vulnerability to complex supply chains and structures that they haven’t fully grasped or untangled. And what we’re doing right now in this process of relocalization is to untangle that capacity so that we reduce our vulnerability to forces beyond our control at far distances.

Now we should maintain that connectivity because you could imagine a place that says, “Aha! I’m fully self sufficient now, we produce our own food. Thank you very much. We’re pulling up the drawbridge again”, but then you have a mega drought. Well, you really want to make sure that you have that connectivity that resilience that stems from connectivity, so you can still get what you need if you suddenly go offline, so to speak.

So that’s the virtue of globalization in the context of increasing regionalism or localism. You want to have the balance right. Or you want to have the ability to toggle between the two. And that’s actually to be the optimist- the accidental optimist I sometimes call myself- you can be accidentally optimistic because we’re not doing this in order to create a more resilient global system.

We’re doing this to stick it to China and to near shore supply chains because we don’t trust China, and because of domestic exigencies and pressures in our politics. We’re not doing this because of some big picture desire to reduce global greenhouse gas emissions and simplify global complexity, because people don’t grasp that. But all of these individual actions that derive from parochial motivations, whether they’re geopolitical or economic or political are actually still pushing in that direction, which is why I’m an accidental optimist.

And so we are literally heading in the right direction. But we are probably just not doing so as fast as we should and therefore take longer than it should to get there. And there’ll be a lot of damage unnecessary, sadly, and collateral damage along the way. But I actually think that we’ll get there. And the question that I ask towards the end of the book is, well, how many people will there be left in the world by the time we get there, will it be 7 billion? 6 billion? 5 billion people?

Roughly what year will it be that things, quote, unquote stabilize again? When, of course, our sustainable technologies, renewable energy kick in and emissions have dropped, and potentially we’re able to stabilize the climate. And we have adapted billions of people and relocated them and come up with these new circular practices. And where have we done all of those things?

The road, the path, whereas all of those things is unfolding right now. So they will eventually all intersect and there’ll be a new equilibrium, a new planetary equilibrium, not just in each country, but rather at a global level. And I ask myself, what does it look like? When will we get there? What will it take? And where will people physically be when we reach that point?

And again, I’m not sure I can confidently answer those questions, but we might know that we’ve gotten there when fertility starts to increase again. Interestingly enough, because we lack that civilizational mojo right now, like, literally, as we speak, part of why fertility is declining. It’s like a self defense mechanism. We literally don’t trust ourselves to have more children.

Interview young people today, or just look at all the surveys. Today’s youth are the most psychoanalyzed generation in the history of the world. They don’t want to have kids because they think it is damaging to the environment. But so therefore, if we do achieve a new sustainable equilibrium in the world and this having taken place after our world population goes through the dip that it’s going through and about to go through, at what point will we say, you know what?

We really got that climate change under control. We tamed that complexity that was running amok, and we’re ready to procreate again, that’s not the only metric we would have for, quote, unquote success. But it’s one very interesting one that I play around with in terms of trying to assess global psychology.

[01:01:17.270] – Grumbine

Right. This is amazing. I really appreciate the time I could stay on here for hours. You’ve kept me riveted. Steve Keen, who is a good friend of the program and world famous economist, talks frequently about returning back to adding energy and soil depletion to our models to understand where we are.

And it would be a very interesting study to see how that maps with the migrations, because where you have healthy lands, the minute you start building on it, they’re no longer available for growing food, right. As these migrations occur, maybe the soil stops being depleted and naturally starts becoming an area for us to in fact, grow food again.

[01:02:01.910] – Khanna

Yeah, there’s countries with suboptimal agricultural output as a result of either unsustainable practices or not having the right technology or not even cultivating enough because they don’t have enough people to do so. That’s certainly one thing. But on the other hand, we want to avoid the tragedy of the Commons.

And this is something I’m very mindful of in the book, which is that given our very poor track record in sustainably cultivating habitats, we don’t want to just relocate three or 4 billion people all of a sudden and trample on those remaining pristine geographies in the world.

So I’m very, very cognizant of that counterargument to what I’m saying, which is why I argue for what I call Civilization 3.0, which is doing things in a more sustainable and circular way. And we have all the technologies to thread that needle today in terms of again doing mass resettlement, not destroying our Arable land. And countries have been learning.

Countries like China have been learning not to urbanize on Arable land, and they learned this lesson, interestingly, you could say the hard way. Because China is the origin of soybeans and soy cultivation going back 5000 years, but they’re also now not only the world’s largest soybean producer but the world’s largest soybean consumer and importer.

So once they realize that they have to import soybeans and there’s vulnerability inherent in that tendency, they said, stop building cities on our farmland because we should be growing more soy. And let’s start to obviously do more sustainable urbanization. Sustainable urbanization is something that we can do more and better everywhere in the world based upon today’s technology.

So on the issue of including soil fertility and models, I would say yes, but you would want to complement it with the fact that we no longer need soil per se for growing food, given where we are with hydroponics, aeroponics and so forth. So I think that it’s important and pretty much every consumed resource we should attempt in some way it plays a role to a greater or lesser degree in our overall economic wellbeing and should have a place in our models. But we should also look at the ways in which we are attempting to short circuit those traditional resource dependencies.

[01:04:24.470] – Grumbine

Love it. Thank you so much for your time. This is one of my favorite interviews I’ve done so far. Thank you so much for taking the time and really going through each of these things. And I own the book. I’ve gotten through several chapters, and I can’t wait to finish it. So, Parag, please tell our listeners where we can find more of your work and what’s coming up.

[01:04:43.550] – Khanna

Well, it’s paragkhanna.com, so if you can spell it, you can find it. P-A-R-A-G-K-H-A-N-N-A. So Move is just out. So I really appreciate your taking the time to have this conversation so early on. To me, it’s something of a mission.

I’m working on a data science product that helps us to figure out what the optimal geographies are for human habitation and to think about how they can be sustainably developed. So it’s more than just a book. To me, it’s kind of a mission, and it’s something that’s kind of a hybrid of profit and nonprofit operations. So I’m really throwing myself at that pretty much full time.

[01:05:24.470] – Grumbine

Well, it’s amazing, and I am going to dig in even deeper because you’ve really piqued my interest in things that I have known are there, wanted to learn but didn’t realize where and now I know I’m coming to you, sir. Thank you so much for your time and folks, my name is Steve Grumbine. This is my guest, Parag Khanna. This is Macro N Cheese. We’re out of here.

[01:05:45.180] – End credits

Macro N Cheese is produced by Andy Kennedy, descriptive writing by Virginia Cotts, and promotional artwork by Mindy Donham. Macro N Cheese is publicly funded by our Real Progressives Patreon account. If you would like to donate to Macro N Cheese, please visit patreon.com/realprogressives.