Show notes
Audio source with transcript: Jeremy Grantham on the Meb Faber PodcastRead the full paper: (which is investment focused) The Race of Our Lives RevisitedClip 1:The point is that we are not winning what we call the rest of our lives. The amount of carbon dioxide extra in the air last year was the highest ever increment. And we don’t start winning until A, that gets to 0. And then we have to backtrack and we have to find a way of pulling it out of the air to take it over the following several decades back down to 280 parts per million. We’re currently at 415 and we’re surely heading for 550, 600, and I hope not 700, 750 but something like that. And we’re going to have to take it out of the air by direct air capture or by biological means by planting trees and by growing seaweed and doing many exotic things, and hopefully, getting paid a carbon credit for doing it, and hopefully, having technological breakthroughs so that the credit we need is only $25 a ton and not $250 a ton because we can afford $25 a ton to get the job done. But we are going to have a lot of pain from the damage we’ve done to the environment, mainly in terms of greenhouse gases. And it’s going to be very expensive and very difficult and highly probably a big chunk of the world, something like 15% will basically become uninhabitable that currently is habitable, which a lot of it is the kind of Saudi peninsula and parts of the Sahara and so on, sub-Sahara, which are bad enough. But the really bad news is that it’s most of the Indian subcontinent, which will in 50 years when the really bad news occurs, will have 2 billion people on it. And a big chunk of the world’s population, which will probably be about nine by there. And then parts of Indonesia, that just unlivable, that the combination of humidity and heat will mean you can’t go out and do your farming, and how much that will stress out the rest of the Indian subcontinent where they still can’t function, I don’t know, but it won’t be pleasant. And Africa is already being stressed, has the worst soil and the worse governance and so on.Clip 2:I got to tell you a story about the Manhattan Project, which is a perfect example for people who think government can’t do anything. Listen, guys, if government couldn’t do anything, we would not have won World War II. America went from producing cars to producing tanks, and jeeps, and destroyers pretty damn effectively. And it was all done at the top. It was all planned. It was Galbraith, the economist was minister of this and that, you know. It was done by a heroic effort. But the Manhattan Project is unique because I knew a fellow who was on an Investment Committee of a mutual fund that we ran. And we used to meet them four times a year as obstreperous committee of scientists and so on used to grill us. And eventually, I discovered that one of them had won the Nobel Prize, I’d met him through the fund, for working done decades before I even met him. So he got the prize after six or seven years of working together for work he’d done decades earlier. He’s been taken out of Harvard, as an undergraduate physicist, and he’d been stuck in the desert as a 19-year-old or a 20-year-old, working side by side with Italian Nobel Prize winners and things. What amazing demonstration of out of the box thinking and risk taking that was going on in the Manhattan Project, I had no idea. And to prove how good it was, he did indeed get a Nobel Prize himself, you know, 50 years later for work he’d done 30 years later. The Manhattan Project took a job that would have taken 15 years easily and then crammed it into three-and-a-half years by dint of money and brilliance and gathering these people together and using any talent they could get their hands on, like this kid. And if we could do half as well, we would be in great shape. We would definitely make the cut. And the fact is that governments can do it if they get their brains together, if they get their act together. The race of our lives will be decided by the difference between what humans are capable of doing and what we will actually do. We can win this race and along the way, get rid of poverty and so on, if we put our best foot forward. But given half a chance, we mess it up. That’s what they say, never underestimate the power and creativity of the homosapiens, and never underestimate his ability to foul it all up.