Some hard questions about a world of plenty

In this episode of the Century of Plenty podcast, Chris Bradley, Marc Canal, Nick Leung, and Sven Smit share reactions to their book from around the world and take on the hardest objections regarding demographics, climate change, energy, and AI.

In this episode, the authors discuss:

• How audiences from China to Africa to Europe accept that a world of plenty is possible, but there are real debates about execution.
• How collapsing fertility, rather than resource limits, may be the century’s defining challenge, and why growth and adaptation can address climate change even in an economy eight times larger than today’s.
• Why AI is better understood as a curve than as a fixed point, and how a shift from zero-sum to non-zero-sum thinking could turn plenty from possible to probable.

The following transcript has been edited for clarity and length.

Reactions from around the world

Sven Smit: Hi, everyone. Nick, Chris, Marc, and I are together again, and we’ve had lots of conversations about A Century of Plenty. Let’s start with some reactions we’ve heard so far. What have you been hearing, Nick?

Nick Leung: Well, there are a set of questions and reactions that are pretty consistent across the world, but the relative emphasis has been very different. The one thing I thought was very different was the optimism and how people accept the possibility of plenty—the initial possibility. When I was in China, you had a room full of nodding heads. Then there were a lot of questions, of course, about demographics.

In Africa, it was also interesting. We had an Africa lunch in Davos, and the whole room had, on the one hand, the feeling of, “Wouldn’t it be wonderful if Africa were the next region to experience what Asia has experienced over the last few decades?” That is clearly one of the things we extrapolate in our book.

But then, very quickly, talk came back to questions of, “What about the rule of law? What about institutions? What about corruption?” These things came up, followed by a lively debate among the various African guests and colleagues in the room about what could happen and how these problems could be solved.

In each of these contexts, after an initial set of questions, the discussion would become quite constructive: What do we need to do? How do we increase the probability of this outcome? I was very inspired by that. What about you, Chris?

Chris Bradley: There are a few things. One is that we get labeled optimists, and I think that’s kind of weird because I thought we were simply factual. I went to a recent lecture by Steven Pinker, and he said, “Yeah, everyone calls me an optimist, but all I’ve done is draw the charts and tell people what’s happening.”

It’s surprising. From really senior business leaders down to university students, they say, “Oh, you’re optimistic.” Yet optimism is probably the right bet. That’s been the dominant reaction, typecasting this as an optimistic book. But people like that. Then we have to say, OK, there’s a gap between the optimistic reality they think we’re painting and their perception of what we can actually achieve within today’s structures. Marc, what have you been hearing?

Marc Canal: In China, the major reaction was, “Of course it’s possible. Now let’s make it probable.” My experience in Latin America was quite different, maybe because Latin America has recently been growing less, so it’s a bit less optimistic, even though Latin Americans have a reputation for being optimistic.

At the same time, they were quite skeptical even about the possibility of plenty. It was very interesting to give them, as you were saying, Chris, the basic numbers and curves. Have you seen that report from South Korea in the 1960s that says, “There’s not much to do with South Korea. There’s not much reason for optimism”? Then you look at the numbers showing what happened afterward, and the rest is history. It’s well known.

In general, once you tell the story, it comes alive, and people see it. But one reaction I found was greater skepticism at the beginning, and then it changed as we spoke.

Sven Smit: Maybe one summary of the reaction is “a positive counterpoint in complicated times,” which reflects the optimism, Chris, that gets thrown at you.

The optimism in this book is, of course, only that we say this outcome is possible. We have not said whether we are optimistic that we will actually do it. That is more of a choice. We didn’t talk about whether government systems would act.

I travel around Europe a lot, and in Europe, even if the possibility is accepted, there’s more pessimism about execution. But when I get asked, “Are there any positive points? Can you see the mood swinging?” I have to say that the German chancellor, Friedrich Merz, made a remark that I found very interesting. He said, “We didn’t lose to China, nor did we lose to the United States. We lost to regulation and permits.”

If you think about it, what we say in this book is that this is a world that needs to be built—with power generation, new housing for the poorest, and all that kind of stuff.

Chris Bradley: As an Aussie, I feel like I straddle this. Australians are a blended average of Britain and America in a profound way, and I’ve given the talk in all three places: Britain, the US, and Australia.

The US was interesting because this is an economy where the latest nonfarm productivity reading was about 5.4 percent. They’ve got surging investment. There’s this feeling of “go, go,” especially in San Francisco where people can see with their own eyes what’s happening. The mood there was, “So how do we capture it? How do we do that?”

The mood in London, where I spoke to very senior, seasoned policy types, was much more, “Chris, the book misses the policy question. Where is the role of institutions and governments?”

I thought that was interesting. Then we had a conversation about the very unusual superhero in our book: the modern firm. The megafirm is not the evil in our book. It is the thing that does most of what makes development happen.

European audiences find the size of the firms striking. One of these big US firms—the big seven or ten, or whatever the number is—can have more free cash flow or operating cash flow than all annual bank lending to companies in America. They’re like their own capital market, their own force of nature. The Americans are excited by that. The Europeans worry about it, and perhaps they accept less readily our thesis that large, thriving firms are foundational characters in our book.

Looming demographics questions

Sven Smit: One of the biggest questions we faced was whether the world should simply have a smaller population. Shall we start by taking on demographics?

Chris Bradley: Let me frame the issue. Basically, in the Western OECD world and China, we’ve demographically peaked. By that, we mean that working-age people as a share of the population had been increasing for a long time, since the 1960s. We call that the demographic dividend.

For the past ten years or so, it has been declining, and you can already see the early symptoms in government debt in places such as Italy and Japan. We are beginning to see it change the social compact. But that is only the beginning because, in those places, we now have four people working for every person aged 65 or older. By 2050, it will be only two. And that’s not even the bottom of the hill. We’re skiing down a very large demographic hill that is unprecedented in human history. The thing most people are surprised about is that Latin America and India, the next group of countries, are close behind. They’re going to peak in, what is it, Marc?

Marc Canal: About ten years, more or less.

Chris Bradley: It’s very soon. Most people don’t believe that Australia has higher population growth than India and Indonesia, so that surprises people.

The third wave is sub-Saharan Africa. It doesn’t peak until about 2080. That’s the fundamental idea. If you add it up, it means the number of humans on the planet is decreasing. A fertility rate of 0.7 in South Korea means that, for every 100 grandparents, you’ll get 13 grandchildren.

When we wrote this book, we didn’t want a world of plenty with empty schools, sad towns, and shuttered windows. So we adjusted fertility to start to normalize back toward 2.1 [the replacement-level fertility rate]. Compared with the UN projection of, I think, about ten billion in 2100, we get up to about 12 billion. But some ask, “How can you talk about a century of plenty when we face this fundamental existential crisis and the world is falling in?” We respond: “We’re simply imagining whether the math works with more people.” And I hope we show that it does.

The problem we run into is that no government anywhere has ever found a policy that sustainably increases the fertility rate. That becomes one of the giant, dark-matter variables in our whole book. That’s the setup.

Sven Smit: Let me add two dimensions. The first is that I hope there is a positive, reinforcing loop between the possibility of plenty and this discussion. If you look at surveys, one reason fertility rates are lower is that young adults have a negative view of the future. They say, “Why would you bring children into this world?” This world could mean climate change, a pandemic, war, or AI eating jobs.

The Edelman [Trust Barometer] survey just came out again, and it says that young adults in most of the Western world believe the future is not progressing at the pace their parents experienced. That is different in India and elsewhere, and I think those differences around the world are important in this discussion.

But, Chris, thank you for that simple image about South Korea: 100 grandparents with 13 grandchildren. I find that image very powerful. Many people come up to me and say, “Come on, immigration will solve it.” In the McKinsey Global Institute work done last year, which Marc was also part of, we showed that, since fertility is falling everywhere, immigration simply shifts the problem of where the unbalanced population pyramid is located.

Others say, “Robots will save the day.” But we wanted the productivity gains from AI to make people wealthier, and you can see this in Japan’s dynamics. Some people say Poland will surpass Japan in GDP per capita this year because, while Japanese workers are still becoming more productive, all those gains are being consumed by dependency. If you think about 100 grandparents with 13 grandchildren, you can imagine robots overwhelming the grandparents. That can’t be the destiny of life.

I will always add that at some point we have to solve this if humanity is to survive, because the ratio of 100 to 13 keeps repeating. Those 13 will have 13 again, and then we’re at 0.1. Somewhere, the world has to solve it, and I’d rather solve it sooner than later.

Marc Canal Let me put some numbers around this because I think some people don’t realize the extent of it. The fertility rate of 0.7 in South Korea may be better known. People have heard about it and say, “Sure, but it’s only South Korea and Japan.”

We got the new fertility-rate data point for China, and it is 0.93. It’s quite close to South Korea. Some countries that have lower fertility rates than the US today include Colombia, Costa Rica, Iran, Mexico, and Türkiye. This is a genuinely global phenomenon. That speaks to the issue Sven was talking about with migration. In the short term, maybe migration can help, but in the long term, the planet has, by definition, a net migration rate of zero.

One more example: Bogotá today has a lower fertility rate than Tokyo. Again, this is happening everywhere, and I don’t think people fully realize that.

Chris Bradley: Let me lay out the bear case and the bull case.

The first bounce of the ball in the bear case is a smaller working-age population and fewer people doing the work, so you need much greater growth in productivity and participation.

The second bounce is that this seriously disrupts government finances. The tax base erodes. Older people not only pay less tax but are also much more expensive. The social contract that we’ve all grown up with and think is normal starts to crumble, and you get serious headwinds.

The third bounce is that it forces interest rates up and growth rates down, and you get spiraling problems of out-of-control debt. That’s the bear case people talk about.

The bull case, I think, is that humans are adaptable and everything is downstream of culture.

Go back to the baby boom, when births increased. What was going on? Cheap houses, economic optimism, and the first wave of automation. Maybe cheap houses, economic optimism, and automation that makes life easier, more fun, and better will do it.

The real question is whether human culture will adapt with a survival instinct. The problem is that, theoretically, there’s no real reason a culture would settle on a fertility rate of 2.1. There’s no biological or scientific reason. But most successful cultures in the world evolved systems of values, religion, and culture that promoted families.

Taking on runaway climate change

Sven Smit: I want to move us on to the other externality discussion that always comes up. It starts with climate. Nick, you raised the question of runaway effects. I’ll take that head-on, and then perhaps we can discuss the other externalities beyond climate, such as biodiversity.

I want to take the bull by the horns on runaway climate change. Of course, nobody on this podcast wants a runaway climate. I think that risk is why we are debating the issue. The world doesn’t discuss climate change because of one degree of temperature change. It discusses it because, at some point, the climate could become unstable.

What we describe in the book is that the world is currently heading toward a range of 2.0 to 2.6 degrees with what is called current policy. If you move to what is called a sustainable transformation, in which you bend the curve, it brings the range back to about 1.8 to 2.0 degrees.

But that is with an economy three times larger—not plenty, and no significant catch-up growth for India or Africa. It is strange that we have somehow assumed, in many IMF, World Bank, and IPCC [Intergovernmental Panel on Climate Change] scenarios, that three times is the right answer for the economy. That is much slower growth than we’ve had over the past 100 years, and it basically denies catch-up growth.

In a reaction on social media, somebody showed a fascinating picture of Switzerland 100 years ago, which didn’t look very different from some of the poorer places in the world. This is where Switzerland went. That picture showed me something I didn’t know: Switzerland was that poor 100 years ago. So Burundi’s transformation is possible.

A three-times-larger economy is what the scenarios assume. We model an economy eight times larger. The eight-times economy adds only 0.1 degree to the range of 1.8 to 2.0 degrees. I don’t believe the plenty discussion accelerates the runaway-climate discussion by 0.1 degree at all. You can believe that 1.8 to 2.0 degrees is too much and that it leads to runaway climate change. That is what the world is doing right now.

We’re simply suggesting that we’ve done the math and shown that, by creating plenty, you’re not going to make the world worse. I can make an argument that you can make the world better because you will crowd out some oil and gas usage with other uses that release less carbon—for example, fertilizer, plastics, and other materials in which the carbon is stored rather than released into the air.

The second thing is that innovation—batteries, nuclear power, and everything else that needs to come—will accelerate if there’s more money in the system. With more money in the system, we could have innovation at scale much earlier than we otherwise would. If you have a production system for nuclear reactors, fantastic batteries, and lots of solar, all of that will come faster in a world where everybody is in building mode.

It’s interesting because we discussed it a million times while writing the book: How do we write this? Is this the chapter that will trip us up?

In public conversations, I’m surprised by how little this argument gets challenged. Seventy to 80 percent of what we describe in our book as necessary to reach an economy 8.0 or 8.5 times larger is catch-up growth for the poorest. It’s Africa going to Switzerland. It’s India going to Switzerland. It’s Indonesia going to Switzerland. It’s the poorest people in Europe, the United States, and Latin America going to Switzerland. Denying them that for 0.1 degree is, to me, a false discussion.

We can then ask, “Can we do better than 1.8 degrees?”

Marc Canal: Another point that may be underrated in the public discourse, although it is now gaining currency, is adaptation. What we see and describe in the book is that economic growth comes with built-in adaptation. It’s not only about mitigating emissions, which is what most of the discourse focuses on, but also about building defenses and protecting ourselves against climate hazards, which have happened in the past and will continue to happen.

If we look at the data, about 100 years ago, roughly half a million people died every year from natural disasters. Today, the number is fewer than 50,000, and we have four times as many people in the world. That is because our economies have grown, making us wealthier and our infrastructure better.

In our new work on this topic, we show that much of the adaptation consists of things as simple as air-conditioning and irrigation systems. All this catch-up growth will come with built-in adaptation systems that will also improve outcomes in the future. I think that’s a slightly underrated point, although, like demographics, it is gaining more currency and being discussed more often.

Chris Bradley: In this book, we came out and said, “Listen, we think net zero by 2050 is a very difficult bet, and it probably isn’t going to happen.” We were so nervous about writing that. We felt as though we were on the edge. But that isn’t the debate.

Sven, you’ll remember someone asked, “Why do you even believe emissions will go down?” Our current-course scenario had emissions going down, and they asked, “Why do you even believe that?” They thought we were optimistic to think emissions would decline. The debate has moved. It is still an extremely sensitive and serious issue.

As we say in the book, we don’t reinvent the IPCC. We read the footnotes. We interpret its findings. But it comes down much more to how we achieve the right trade-off among human welfare, poverty alleviation, technological development to solve all these problems, and reducing carbon in the economy.

The energy race and externalities

Nick Leung: In China, the discussion always moved quickly to the next part of the conversation, which is energy systems. Because of the tremendous recent growth of renewables, particularly in China, people can see it in front of their eyes. Even though everyone understands that China is a massive user of fossil fuels, you can see the speed at which renewables have been growing. People immediately assume this is a question of how quickly we can address energy systems, and the conversation moves there very quickly. Maybe that is the next conversation we should have.

Chris Bradley: We’re always saying that China builds ten times as much new energy capacity each year as the US does. The numbers for last year just came out, and that continues to be true.

Coal plants also increased again as part of the mix in China. The number of new coal plants went up by something like 75 percent. The reality is that geostrategic competition is becoming a major force. You heard it at Davos. You heard Merz and [Canadian Prime Minister Mark] Carney talk about the need to reindustrialize our economies, reenergize, and rearm.

That, along with the AI race—which is really an electrification race—has profoundly shifted the debate. The good thing about electrification is that electrons are awesome. When you get more electrons into the economy, that’s how you decarbonize.

Sven Smit: I think what has happened—and we should not lose sight of this, since I said the climate and energy debate is the area where we were surprised by how little reaction we received compared with the next set of externalities—is that people have fully realized that energy makes the world go around.

The idea that you can run the world with less energy has stopped. We probably need more energy because of AI and other things, and within that context, we try to solve the problem. That is a reframing from the idea that you can simply replace the old energy one for one.

In particular, if you take our plenty approach, we say we need two to three times as much energy to reach plenty. That is because we ask for an economy 8.5 times larger, not three times larger. If you use the old frame of an economy three times larger, you’re in a permanent battle to replace something, which is much harder than expanding something.

Let me start with one of these externality questions. It’s a small one: Does the world get dirtier with plenty? Do you get more dirt in the rivers, on the land, and in the air?

This is not pollution at the level of the climate discussion. It is pollution in the material world. I like to tell a story from my personal life. When I was six years old, you couldn’t swim in the Rhine. Then we got rich, and we cleaned it up. You can now swim there, and salmon have returned. I would prefer a path that doesn’t go through that stage, but I can see an echo of it in what has happened in Indian and Chinese rivers.

That is also true for biodiversity and the other issues that come up. Some of these issues are more urgent in time than climate change. If I think about the Big Five [animals] in Africa, they are at risk over the next few decades, not the next 50 to 100 years.

Marc Canal: I think we’ve turned some corners in many of these cases that people don’t realize, probably because they don’t make the news. For example, the world has passed peak pollution. For some time, many countries have been reducing plastic pollution to rivers and oceans. Much of what reaches the oceans is the result of a lack of wealth to fund waste-management systems. Of course, you can take measures such as London, where pollution is down about 90 percent since the 1970s. But people don’t realize that, globally, we passed the peak about 15 or 20 years ago.

Biodiversity is one of the most complicated issues. With biodiversity, the main reason we have problems is that we expand land to grow food. There are other reasons, but that is the number one reason.

What we calculate in the book is that, by achieving yields and agricultural-productivity improvements that are lower than what we have accomplished in the past, we could grow enough food without expanding the amount of land we use. That alone would solve a large part of the biodiversity problem. It doesn’t solve every part. Then we have to think further about what more we can do.

But a large part of the solution comes down to technology and catch-up technology. Many parts of the world are less technologically advanced and could increase the productivity of their land.

Misperceptions and fears about AI

Chris Bradley: On the AI question, there are two main categories of error.

The first is seeing AI as a fixed point rather than a curve. When you follow it as a curve, I think the best metric at the moment is the time span of its attention, which is doubling every seven months. The common reaction is, “AI has all these limitations.” But that is looking at a point rather than the curve and how dramatic it is.

The second error is seeing the set of activities in the world as fixed. That creates this replacement mentality: “AI is going to get good, and everyone is going to lose their job.” Look at GitHub, for example. The amount of code being posted to GitHub and the number of software applications being launched are growing very quickly.

The two mistakes are underestimating that we’re on a curve—which, by the way, is moving three to four times faster than Moore’s Law—and assuming the world will not respond to that curve in amazing ways.

When you have that conversation with people—“Let’s look at the curve, and let’s imagine what becomes possible with these technologies, what kind of demand emerges, and what kind of problems we’ll solve”—the debate feels much less scary.

Marc Canal: In the past, technology mostly changed the way we work. It substituted for some tasks, amplified others, and so on. AI will do that, of course, but there is something potentially fundamentally different about AI: It can also change our innovation machine.

The ultimate resource is ideas. Throughout human history, the ultimate constraint has been our ability to produce and combine ideas, which only humans could do. That, to me, is what is even more interesting about AI.

For the first time, unlike a steam engine, which couldn’t combine ideas and could only execute ideas based on what a human told it to do, this technology can revolutionize the very machine of progress and innovation. In one sense, that makes AI more different and harder to deal with. In another sense, it gives AI even more potential.

Chris Bradley: It’s a recursive technology. That’s what is so unusual.

Marc Canal: Exactly. The other interesting point, when you go to emerging economies, is that people often ask, “What’s in this for us? Technology can take a long time to reach emerging economies. Advanced economies benefit for a long time, and then, after 20, 30, or 40 years, it reaches emerging economies.” There are some fundamentally different things in this case.

With large language models, for example, the interface is very friendly. You don’t necessarily need a PhD in computer science or coding knowledge to get many of the benefits already. The adoption curve could be substantially faster not only in advanced economies but also in emerging economies. By doing things right, many or most emerging economies can benefit from this technology faster than they benefited from previous technologies.

Sven Smit: I want to get to the bubble question because people are suggesting that AI and robots could automate 50 percent of work, and that will give us the productivity we need for plenty. People say, “That’s scary because then we won’t have work.”

In a three-times economy, if we automate 80 percent—some people go as far as 99 percent—then perhaps we all have 100 percent free time. That’s great. But if the economy is three times larger and automation is 80 percent, you actually get two additional free days, which might be too many for most people.

But let’s look at the other side. If the economy is 8.5 times larger and you have 80 percent automation, then we are short of people. Remember the fertility discussion.

A question of framing

Chris Bradley: We always say, “We’ve shown in this book that physics and science aren’t the problem. The issue is mindsets” and so on. The mindset we’re really attacking is a zero-sum, fixed-world mindset, as opposed to a creative-growth mindset. It turns out the world is pretty magical.

That is what I love about this. If we can show a completely different mindset—what non-zero-sum thinking looks like—and make that a more pleasant and addictive way of thinking and talking, I think that is how our book might have a little impact on the world.

Nick Leung: There has recently been a lot of focus on Mary Meeker, who wrote all those reports before the first internet bubble crashed. People looked back at her predictions. When the market crashed, everyone said, “Of course, she was talking it up too much.” Then you look over a decade, and most of what she said did, in fact, come true.

This goes back to the question of whether you’re looking through a microscope or a telescope. Personally, I believe that, because of the amount of capital expenditure required to build AI infrastructure, the only rational argument those raising the capital can make is that everything is going to change, and it is going to change very quickly.

The thesis of our book is: Don’t look only at the short term. Don’t become obsessed with the individual puts and takes today. Step back and look at the longer term. It gives you intelligent and informative views about what will happen in the world.