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Interview with Boris Johnson; Interview with Niall Ferguson, Robert Skidelsky; Interview with Bjorn Lomborg

Aired June 17, 2012 - 10:00   ET


FAREED ZAKARIA, CNN HOST: This is GPS, the Global Public Square. Welcome to all of you in the United States and around the world. I'm Fareed Zakaria.

We have a great show for you today with a lot of great Britons. First, a different kind of conservative and one of the world's most colorful politicians, Boris Johnson, the Mayor of London. He has a surprising message in the euro and on Republicans and we'll talk about the Olympics, of course.

Then, economics, a sharp discussion between two great scholars; Robert Skidelsky, the biographer of John Maynard Keynes, and Harvard's Niall Ferguson, who is decidedly not a Keynesian, on the euro, austerity and fears of a meltdown.

Looking ahead to the Rio Environmental Summit, a sharply contrarian take from someone who says the whole thing is a waste of time. Finally:


SACHA BARON COHEN AS "THE DICTATOR": I am for free press, fair elections and equal rights for women. I can't say that.


ZAKARIA: What in the world? "The Dictator" might be a fun movie, but dictators in real life are getting smarter, savvier and less authoritarian, but, first, here's my take.

We're now in the general election campaign in the United States, the point at which the candidates are meant to pivot from the primary voters to the general election voters, most of who now are registered Independents.

But this isn't really happening. The Obama campaign started with its attack ads about Bain Capital, which presented a simplistic picture of a complicated reality. Although some private-equity firms have engaged in some bad practices, on the whole the industry has grown so large because it performs a useful function.

Then came Mitt Romney's first major ad which told us that on his first day in office, he would introduce tax cuts. Now, the one idea that is almost certain not to jump-start this economy is a tax cut. After all, that's what we've been doing for the past three years. For those who think President Obama's policies have done little to produce growth, keep in mind that the single largest piece of his policies, in dollar terms, has been tax cuts. It actually began before Obama, with the tax cut passed under the George W. Bush administration in response to the financial crisis in 2008.

Then came the stimulus bill, of which tax cuts were the largest chunk by far, one-third of the total. Then, the payroll tax cut, the small business tax cut, the extension of the payroll tax cut, and so on.

The president's Twitter feed boasted that, "President Obama has signed 21 tax cuts to support middle class families." And how has that worked out? The "Wall Street Journal" explained this away saying that the problem is all these tax cuts are temporary. If only we had across-the-board cuts in rates, except that these were tried as well.

The 2001 Bush tax cuts were designed precisely along those lines. They were, in dollar terms, the largest tax cuts in U.S. history. And the economy got worse, not better. In fact, the years 2000 to 2007 were the period of weakest job growth in the United States since the Great Depression.

Now, look, tax cuts can stimulate growth, especially when you go from say 70 percent rates to 30 percent rates as Ronald Reagan did, but a cut of a few percent from a reasonably moderate base or a temporary waiver of some small tax provisions, is highly unlikely to unleash lasting growth.

What it will do is explode the deficit. For four decades, Washington politicians have bought popularity by cutting taxes, always saying that spending cuts or growth will make up for lost revenue. That never happened, and the result is $11 trillion in federal debt held by the public.

And, finally, now, this week, Democrats have been busily defending public sector unions. Public sector unions are big backers of the Democratic Party, but they're retirement benefits are, in fact, bankrupting states and localities across the country.

California's total pension liabilities are now 30 times the size of its budget deficit. Ohio's now add up to 30 percent of the state's total GDP. This is utterly unsustainable. The growth and size of these benefits are now making it impossible for governments to spend on education, infrastructure, parks, really anything.

At some point, the candidates -- both candidates need to stop pandering to their bases and start speaking intelligently to the mainstream voter about their vision for American. We're waiting and let's get started.

By some accounts, my next guest is the most popular politician in Great Britain. He's a conservative at a time when Tory policies have steered England toward what some are calling a double-dip recession and, yet, he's just been reelected. Boris Johnson is a two-time Mayor of London. Is the former editor of "The Spectator" magazine and he has a new book out: "Johnson's Life of London: the People Who Made the City that Made the World." He joins me now.

Boris, pleasure to have you on.

BORIS JOHNSON, MAYOR OF LONDON: Fareed, by the way, to be the most -- even if I were the most popular politician in Britain or England, which I doubt, it's not a very hotly contested field. It's a pretty minimal accomplishment.

ZAKARIA: But tell me why that is because your party, the Conservative Party, came into power and said we're going to do the thing that we have to in order to save Britain and, in doing so, we will rewarded by the market --

JOHNSON: I know.

ZAKARIA: -- We will rewarded by the economy and, in fact --

JOHNSON: Well, it's all going very slowly and there's no doubt at all that the economy -- look what's happening to the numbers here in American. You're seeing the same sort of problems in many European countries.

I think it's a lack of confidence and I don't take the same analysis as many of the members of the European political establishment or media, which is that you've got to sort out the euro by creating this fiscal union. I think that's going the wrong way.

I'm afraid to say that that exercise is just going to compound the mistake and we spent two years now bailing out Greece, bailing out Spain, pumping money into it, trying to get the Germans to be more generous, trying to get the peripheral countries, the Mediterranean countries to be more austere, cut more from their budgets, put more people on the dole.

ZAKARIA: What would you do? Would you let it all collapse?

JOHNSON: Well, that's obviously -- would be a disorderly outcome. What would be great would be, I think, if the European leaders could face up to the reality, shrug off their egos, shrug off all the political capital that Europe has collectively invested in this project, and say, look, we made a mistake.

We've put countries into a scheme, a Procrustean scheme, a one- size-fits-all currency union which they're not suited to. Let's have a realignment, let's do a bisection, let's do a North euro and a South euro, but they've got to take control.

ZAKARIA: So that means the best answer is break up the euro and allow the southern countries to have their own currency and devalue.

JOHNSON: To devalue -- to devalue, to get the benefits that come with competitive currency again and, obviously, it would be difficult. I'm not denying that there would be great strains and there would be all sorts of consequences for banking and all the rest of it, but you'd have lanced the boil.

People would know where you were. We're sort of skiing downhill blindfolded and we don't where the bottom is and it's just going to go on.

ZAKARIA: Now, you said something that suggested that you were disparaging the -- you said something that was disparaging about austerity.

Now, the question I have for you is austerity in Britain because you're great friend, the Chancellor of the Exchequer, when he came into power said, look, we have to make these sacrifices because it will restore market confidence, it will give business the boost it needs and they will invest.

In fact, what's happened is you know the economy has suffered and many people from Robert Skidelsky to Martin Wolf said this is precisely what will happen at a time when the economy is weak. If you cut government spending --

JOHNSON: But he hasn't. I mean the -- I hear what you say, but the reality is that actually the government hasn't cut spending in quite the way people say that is has and spending continues to be, borrowing continues to be -- I think possibly there's been a lot of restrained spending.

And they've tried to cut some of the crazier schemes and they're trying to reduce the size of the public sector in so far as they can, but they haven't made the savage cuts that some people accuse them of. I do think it comes back to this issue of confidence.

And I do have a lot of sympathy for the Chancellor and for the Government, for the Coalition because business is sitting on these cash mountains. They've got the money. They could be investing in new employees.

They could be doing that, but they're not because they don't know what's going to happen in the euro zone. They don't know what's going to happen to the banks.

ZAKARIA: When you watch the American debate, who do you find yourself routing for as a Tory?

JOHNSON: Mike Bloomberg. I'll be honest, the mayor. We mayors have to stick up for each other in all circumstances and I look at -- ages ago, I wrote a piece in favor of Obama. I think I was about the first British politician to say, "Come on, Obama, why not?"

And I have to say that, you know, he hasn't reciprocated. You know, I just won an election, I don't remember him endorsing me.

ZAKARIA: So the bloom is off the rose.

JOHNSON: But he probably had other things in his "in" tray. I've got to be -- you know, I've got to be realistic about it. I'm an admirer of the president in many ways. I don't know very much about Mitt Romney. You know a lot of people say he's got great qualities. It's hard for me to judge.

But, I do know Mike Bloomberg. I have met him a lot of times and this is a guy who not only set up a massive media empire, 22 billion quids -- worth or dollars worth, sorry, he also has great experience as a public servant and does some interesting and innovative things.

And whatever you think about his crazy thing to do with banning the size of cups or whatever --

ZAKARIA: And what do you think of that?

` JOHNSON: -- Well, whatever you think of it, it shows a very, very pragmatic, can-do approach to government. I don't know if there's very often will I think about the size of cups. I don't know. I mean, it's not instinctively the kind of thing I would do, but if it can reduce childhood obesity.

ZAKARIA: We're going to take a break. When we come back, I'm going to ask Boris Johnson about conservatives, how American and England compare and I'm going to ask him about the summer Olympics, of course.


ZAKARIA: And we're back with Boris Johnson, a man how has worn many hats, Mayor of London, planner of the Olympics and former editor of Britain's flagship conservative magazine, "The Spectator."

Do you think that conservatives in America, the Republican Party, is very different from conservatives in Britain?

JOHNSON: You know, I --

ZAKARIA: You don't --

JOHNSON: -- I'm a low tax, small state guy, which is why, you know, when Mike says reduce cup sizes, I find it very difficult to compute, but I want to see how it works out.

But on things like -- the social, moral stuff, most British conservatives are far too timid to get involved in that sort of stuff, particularly me. I wouldn't (inaudible). No siree, that's a matter of a private conscience.

ZAKARIA: But when you say "too timid", so you secretly wish or you think that's not really what conservatism should be?

JOHNSON: I don't think it's central to politics as I practice it. I think it's a kind of these issues become hugely important totems of your beliefs, but it doesn't seem to me that they should be determinative of how you run a country.

I mean what's it -- you know, these things -- gay marriage or gun control --

ZAKARIA: Right, to take on the three Gs, gays, guns, and God.


ZAKARIA: On all them, from what I've read of you, you seem to be more -- you're closer to a Democrat rather than a Republican.

JOHNSON: Sounds like it, yes. I mean I think it's -- I didn't know that gays couldn't get -- I was very surprised to discover that it was bad. I mean it's ridiculous.

That's my -- I mean, there you go. I mean, I'm sorry, it just seems to me that this is -- marriage is an ancient sacrament, a pre- Christian, by the way, system. It antedates all current religions. What's it got to with anybody? That's my view.

ZAKARIA: Mitt Romney says one of the reasons he should be made president is because he did a bang up job running the Olympics. Do you think running a good Olympics is a qualification for higher office?

JOHNSON: Well, I'm not going to be lured into that elementary trap that you've just laboriously dug for me. Fareed, I think the -- obviously, we're very excited about the Olympics. We're looking forward to welcoming people this summer and hope lots of people will come to America to have a great time.

I spoke to your producer just now who is saying to me that she wasn't going to come because she was worried about the crowds. I want you to -- it's going to be fantastic folks. London is going to be the place to be in the summer of 2012.

And, yes, occasionally, going to one the Olympic venues on the Tube, there will be a press of people, but we're going to make sure people are going to have a great time.

Whether that -- where that leads me in my so-called political career, I don't know. I'm concentrating on this at the time.

ZAKARIA: So, tell me, running the Olympics or planning for it in your capacity, it must be very different from what your day-to-day life was like. What have you learned most about dealing with this enormous, enormous event.

JOHNSON: It's just that -- there's so many bits of a mattress that keep popping up and you got to go in there and press it down and it pops up again. So one day you've got the transport right and then there's a -- then something pops up with security. And you -- it's just there's -- I'm talking about a few months ago.


JOHNSON: We're getting to the state now where things really are starting to be ready. The venues are built. They're looking fantastic. We've got the stadiums complete, the Velodrome, the aquatic center. I mean this is not like some other Olympic cities I could mention.

And we've built this weird kind of curly-wurly pretzel thing welcoming the world, designed by Anish Kapoor, a great Indian artist, financed by Lashkmi Mittal. It's a -- London is going to look fantastic in games time.

And we're half a billion pounds under budget so so far, you know, touch wood, wherever -- it's not as bad as many other Olympics cities have been at this stage.

ZAKARIA: Do you wish you had the kind of powers that the people who ran the Chinese -- the Beijing Olympics had?

JOHNSON: Well, I wish I could blow half our defense budget on the fireworks, yes, which is basically what they did. You know I have great respect for what the Chinese did.

The Chinese had a fantastic Olympic Games, but it was shock and awe, wasn't it? It was shock and awe. They just -- you know, they threw everything at it. We're going to be more subtler and more ingenious and I think more enjoyable.

ZAKARIA: Boris Johnson, pleasure to have you on.

JOHNSON: Thank you very much.

ZAKARIA: Up next, "What in the World?" why the era of brutal, all powerful dictators may be a thing of the past. I'll explain.


ZAKARIA: Now for our "What in the World" segment.

We tend to think of dictators as all-powerful leaders who act with naked cruelty and impunity. Think of Bashar al Assad in Syria or, for a celluloid reminder, look at this scene from Sacha Baron Cohen's new film.

But the film "The Dictator" and our imagination of dictators is somewhat outdated. The modern dictator is more evolved and more attuned to how people think. A new book highlights that trend. It's called "The Dictator's Learning Curve" by William Dobson.

"Dictators have gotten smart," Dobson writes, "to keep pace with changes in technology." Old-school oppressors like Mao, Pol Pot or Idi Amin could keep their atrocities relatively secret. That's not possible today. If a dictator tried to orchestrate a mass killing and keep it secret, it would fail. It would end up on YouTube.

The crimes of Uganda's Joseph Kony are now an internet phenomenon and he remains on the run. War criminals can't count on impunity. Charles Taylor of Liberia was recently found guilty by the International Criminal Court and Sudan's President Bashir has been indicted by it.

So today's cleverest dictators have evolved. They allow a certain amount of dissent as an escape valve. Consider China, there's a new study out this week by three political scientists at Harvard. They've devised a way to analyze millions of social media posts in China.

What's special is that they claim to do this before the Chinese government gets to censor them so it provides a unique insight not just into what the Chinese people think, but also what the government deems necessary to censor.

What do they find? Contrary to what you'd think, it turns out criticisms of the government are not more likely to get censored. Even vitriolic criticism is allowed. The focus is on stopping mass mobilization.

Last year Beijing blocked internet searches for Tunisia's "Jasmine Revolution" to prevent discussions about the Arab Spring. Similarly, last week, searches for the numbers 4/6 were censored, the numbers represented June 4th, the anniversary of the massacre at Tiananmen Square.

The Harvard study shows that Beijing's leaders are making measured concessions. It is said that some 500 protests take place every day across China, but anything that could lead to something larger or more organized is instantly clamped down on.

Another example, Putin's Russia has usually allowed the print media a great deal of freedom on the theory that what a few tens of thousands of people read in Moscow and St. Petersburg doesn't matter. But the regime has taken over television news completely so mass opinion is carefully controlled out of the Kremlin.

We're witnessing a trend in China, Russia, Venezuela, and many other countries, even Myanmar. Gone are the days when dictators could completely ignore the demands of their people. As citizens become more exposed to events around the world, more connected to each other on the internet and social media, dictators will have to make greater concessions.

It's a situation that is far better than how things were 10, 20, or 50 years ago. Regimes like those in Syria and North Korea can act with all-out brutality, but they are outliers. They represent a fading order. The new model is to allow a controlled space for free commerce, for open education, even for dissent. Perhaps people in these countries can use that space to slowly expand the realm of freedom and liberty.

We'll be right back. Up next, is Europe going to collapse and bring the U.S. economy down with it, a discussion with Niall Ferguson and Robert Skidelsky.


CANDY CROWLEY, CNN ANCHOR: I'm Candy Crowley in Washington. "Fareed Zakaria GPS" will be back in 90 seconds. But first, a check of the top stories. Voters in Greece are at the polls for an election that could decide the fate of the Euro and have an impact on the U.S. economy. Some analysts fear today's election could result in no clear winner, leaving Greece with a weak caretaker government.

Another closely watched election is underway in Egypt. Voters are deciding a presidential runoff race between a Muslim Brotherhood candidate and the last prime minister to serve under former president Hosni Mubarak. Earlier this week, an Egyptian court invalidated the country's parliament and constitution.

A wildfire in northern Colorado has destroyed nearly 200 homes and burned 55,000 acres. High temperatures and strong winds aren't helping firefighters. The blaze has forced thousands of evacuations and left one person dead.

Iranian President Mahmoud Ahmadinejad says he'll retire from politics when his second term ends next year. In an interview with a German newspaper, Ahmadinejad said eight years is enough.

Those are your top stories. "Reliable Sources" is at the top of the hour. Now back to "Fareed Zakaria GPS."

ZAKARIA: Everyone is worry about Europe imploding and the impact it could have not just there, but all over the world, including the United States. I have two great economists and historians for insight. Robert Skidelsky is the authority on John Maynard Keynes, the great economist who advocated government spending to promote growth. On the other side sort of, we have Harvard's Niall Ferguson, who usually takes a contrarian view. Gentlemen, welcome.

Niall, first just give us a lay of the land. Everyone's saying clearly not all euros are created equal. I'm going to put my money in German banks. That's the one country that can't default.

NIALL FERGUSON, HARVARD UNIVERSITY: I was talking to a very senior Spanish official last weekend, who said the problem is, if one country leaves, this stops being a monetary union, and it becomes just a currency board. And it's much easier to leave a currency board -- he was thinking here of the parallel with Argentina, and the nightmare scenarios is that these Mediterranean countries are each going to go the way of Argentina when it gave up its peg to the dollar, which was a currency board, a fixed link. And also converted currency deposits in the banking system to a new and much less valuable currency. That's the nightmare scenario that southern Europeans are thinking about. I call this the Latin Europe problem. Because Southern Europe, Latin Europe is beginning to look more and more like Latin America. And if more is not done in particular by the German government to stem this crisis of confidence in Latin Europe, then it's game over for the euro.

ZAKARIA: Do you think there's a way for Greece to leave without it spreading the contagion?

ROBERT SKIDELSKY, AUTHOR, "HOW MUCH IS ENOUGH? MONEY AND THE GOOD LIFE.": Yes. I think so. I don't think -- I don't think Spain, Italy, Portugal, Ireland are nearly in as bad a condition as Greece. I think they're more competitive. I think their public, public -- their budgets are in sounder condition. And I think they can weather that storm. Particularly if there's a big enough firewall put up. But I -- so, I don't think they have to leave. And so I'm not as pessimistic as Niall is, that the whole thing will break up. But what I do agree with him is that it's got to be strengthened in all kinds of ways if it's to survive.

ZAKARIA: The central issue here has been this issue of austerity versus stimulus. Should there be more austerity -- you guys met, we were all in London, July, 2010. And the question I asked both of you was -- are Britain's efforts that are to cut its budget deficit to what was regarded then as a kind of version of austerity, is it going to produce a double dip? Which many people worried about. So let's watch the clip.


ZAKARIA: Is Britain going to go into a double dip?

SKIDELSKY: I think there's a very strong chance that it will, yes.

ZAKARIA: What do you think?

FERGUSON: I think it may dip, but I think it may also bounce back. And we should all -- the world should watch very closely if this experiment comes off. Because if it works, then Britain will be the role model, the poster child.


ZAKARIA: Do you think that in retrospect cutting spending at a time when the economy was weak was -- was the wrong idea?

FERGUSON: Well, there wasn't any choice. And that's the first thing to establish. You know, Keynesian policies are an option if you don't have an enormous debt to GDP ratio. But Britain already did when the conservative government came in ...

ZAKARIA: The highest in (inaudible).

FERGUSON: Or the conservative-liberal government. And indeed, if you include private debt, second only to Japan in the world. So there really wasn't an option. And any government would have had to do the same thing even if Labor had somehow managed to cling on to power.

SKIDELSKY: I don't agree with that. I think Neil is a wonderful spokesman for the conservative-liberal coalition. He said exactly what they're saying. And I don't think any of it is correct. I think that there was never going to -- never a chance that Britain was going to go the way of Greece. It was a sovereign -- it was sovereign, fully sovereign. Most of its debt was denominated in its own currency. It had a central bank that could print money. And -- and so this is very, very different from the situation of those countries in -- in the Euro zone. Britain did have an option.

When you have -- when you have a debt, a high debt, and when you -- when the economy has just collapsed, then of course the debt/GDP ratio rises automatically. Now, how do you get it down, that's the question. I would say and a Keynesian would say you don't get it down by shrinking the economy further. That is a move that will actually cause it to rise. You have to find some way of getting the GDP up, and then the debt-GDP ratio will sink. And I think that's very, very, very clear in my mind. And I think events have borne it out.

What we've had is a great experiment in the application of a particular economic philosophy, which Niall agrees with. He says, oh, well, this is a temporary blip and in a year or so we'll be back to buoyant growth.

FERGUSON: I don't think there will be buoyant growth. I think one has to recognize that under a debt mountain the size of Britain's ...


FERGUSON: It is a mountain. Look, debt to GDP is up there with Japan at 600 percent if you include public and private debt.

SKIDELSKY: Yes, that's ...


FERGUSON: Well, that's pretty important, Robert, because that's unprecedented in history. And anybody who thinks you can magically go back to four, five percent growth under such a burden is deluded. Almost as deluded as the people who think that Britain had a Keynesian option in 2010.

ZAKARIA: Let me move to the subject that -- that, of course, Americans care most about, which is America. You -- one of the things you did argue was that the United States could also face these kind of spiraling interest rates and worries about borrowing. That certainly hasn't been borne out. I mean American borrowing costs have just been plummeting over the last few years. Why do you think that is?

FERGUSON: There's a massive flight to safety. I mean, if the rest of the world and particularly Europe, which is as large if not larger as an economy than the U.S., is self-destructing, investors seek the safe haven of the U.S. Treasury.

ZAKARIA: And does that mean ...

FERGUSON: It doesn't guarantee you much return, but at least you get your capital back.

ZAKARIA: But does that mean that the U.S. has more leeway ...

FERGUSON: It does, yeah.

ZAKARIA: For example, to do infrastructure projects ... FERGUSON: It always has had more leeway. I always said that the crisis that was happening, this goes back two years now in Greece, would spread to the rest of the Mediterranean and might ultimately cross the Atlantic.

SKIDELSKY: I don't think so. I think -- I think in one respect, the United Kingdom has more leeway than America, just because it isn't a reserve currency. It can -- it can allow its currency to fall.

ZAKARIA: To depreciate.

SKIDELSKY: To depreciate without anyone taking any countermeasures. In the United States, the Chinese don't allow that to happen, essentially. So in that sense, Britain has more leeway. And it can -- it can -- it can have less austerity.


ZAKARIA: But you would -- you would want more government spending across the Western world, correct?

SKIDELSKY: I would like ...

ZAKARIA: To introduce (ph) growth?

SKIDELSKY: I would like -- I would like countries in the Euro zone, in the European Union and in Britain and in the United States if necessary to suspend their fiscal austerity programs. I would say put them into cold storage for years, go on borrowing, get the economy growing again. And then you come to the structural problems, face the structural problems that you need to. If you do it now, you simply will get a shrinking economy. That's my prediction. I predicted it two years ago. And it's come to pass. Now it may be wrong, maybe next year we're going to have a resumption of growth everywhere. I think the risks are on the other side.

ZAKARIA: Final word?

FERGUSON: I don't think that option exists for many countries right now. Certainly, it didn't exist for most of the European countries. It may conceivably exist for Germany. But remember, think of the argument that Ken Rogoff and Colin Rinehart have made repeatedly since they published "This Time is Different." Once you get up to a debt/GDP ratio of 90 percent or thereabout, the room for maneuver is pretty much gone, and the debt itself starts to be the drag on growth. And that unfortunately is the position of the United States, and, indeed, most countries in the developed world.

ZAKARIA: Niall Ferguson, Robert Skidelsky, a wonderful rematch. We'll have to do a third one this time, you know, in Paris to do it at the French Open.

Up next, why this week's U.N. Summit in Rio will be a wasted opportunity. I'll have an interesting guest who will explain why.

(BEGIN VIDEO CLIP) BJORN LOMBORG, AUTHOR, THE SKEPTICAL ENVIRONMENTALIST: There's perhaps a 0.06 percent of all deaths in the developing world caused by global warming. There is 13 percent of all deaths caused by air and water pollution. Let's get our priorities right.



ZAKARIA: This week, hundreds of world leaders and tens of thousands of environmentalists will convene in Rio de Janeiro for the U.N.'s Conference on Sustainable Development. My next guest says that summit will be a wasted opportunity. The U.N. is focused on the wrong target. For every person who might die from global warming, he says, 210 will die from health problems caused by a lack of clean water and pollution. Bjorn Lomborg is the author of "The Skeptical Environmentalist" and other books and he joins me now to explain all this. So, you have a "Foreign Affairs" article coming out, in which you point out what the past history of these kinds of predictions and, you know, environmental concerns have been. Explain that point briefly.

BJORN LOMBORG, AUTHOR "THE SKEPTICAL ENVIRONMENTALIST": Well, fundamentally, it's the 40th anniversary of the limits to growth. The idea that we were going to run out of everything. And even if we weren't, we were going to be screwed anyway because we would basically be polluting ourselves to death.

ZAKARIA: This was the report that came out from Stockholm, and it was the Club of Rome report.

LOMBORG: Yeah, it was actually, it came out from Rome. And it was "The Limits to Growth" report.


LOMBORG: That ran computer models, back then -- of course, remember, computers seemed like they were telling the truth no matter what you put into them. And I think with the -- with the oil embargo in '73, just one year later and oil prices shooting up, there was a real sense that, yes, we are running out of everything.


LOMBORG: You know, we are running out of oil. And we need to conserve everything. And we are really on a very, very wrong path. In many ways, you can say, it's set the environmental agenda certainly for a couple of decades.

ZAKARIA: And then, so what are the facts?

LOMBORG: Well, the problem is they were wrong. They were first of all wrong that we were going to run out of food. But perhaps more importantly for the environmental concern, they were wrong about the idea that we were going to run out of all resources. Actually, if you look at the cost of resources, which is the economist's way of looking at how many resources do we have left, the cost of resources generally have come down about sevenfold since 1850. And yes, it's ticked up in the last ten years. But still, just from about twice as much, but if you look at the whole curve, it's very clear, it's a clear downward trend.

Why? Because innovation is much, much more important than using up the resources. The Club of Rome thought was there's only this much resources. When we've used up that, we are really up a creek. But of course what they forgot was we find many more resources and we get much better at exploiting poor resources further away, but even cheaper with technology. And that's really what we've done with virtually all resources.

ZAKARIA: What about the other half of that report, which was about pollution?

LOMBORG: Yes. They also assumed -- and again, it makes sense. In a cultural setting, obviously industry is you put out -- you have belching smokestacks. And they thought as we get richer and richer and there are more and more people, you'll have more and more belching smokestacks. But of course, what they forgot, was technology actually handles a lot of that. Now, we've actually seen air pollution come down in much -- most rich countries for most of the last century. So, it's not just the technology after the Club of Rome report. But of course, after '72, we put extra effort into making regulations that meant that we've gotten even lower levels of air pollution.

ZAKARIA: But this -- and so you support those government regulations?

LOMBORG: Absolutely. We want to have regulation where it makes sense. Where it -- where there's lots of people dying, for instance, from air pollution. That is a real concern. But you should also recognize what is it that drives the ability to care about the environment? It is that you're rich enough that you don't have to worry about your kids dying tomorrow. And that's my real concern about the way we look into the future when we go down to Rio in just a few days, what are we talking about there? Well, we're talking about going to a green economy, and we're talking about global warming. But in reality, the real issues of most of this world is still air and water pollution. Why are we not talking about the important issues in the third world? Why are we talking about -- if you will, somewhat more esoteric issues that clearly care -- concerns first world people? There is perhaps a 0.06 percent of all deaths in the developing world caused by global warming. There's 13 percent of all deaths caused by air and water pollution. Let's get our priorities right.

I'm just blown away by the way that virtually everything we talk about, if you read the U.N., their little leaflet that they distribute for the Rio summit, they show how we should all get electric cars and we should go organic and stuff like that. No. Most people in developing world cannot afford an electric car. But what we should do is focus on innovation to make those cars so cheap. Then the next half century, everyone will want them.

ZAKARIA: And how can we focus on air and water pollution in the third world? How do we deal with bringing that number down from 13 percent?

LOMBORG: Well, there are two main solutions. One is that we have a lot of technologies that we know how to get clean drinking water. We also know how to get much of the air pollution, most of the air pollution deaths are actually caused by indoor air pollution. People cooking with bad fuels like dung or cardboard. Let's make sure they actually get access to fossil fuels. That makes a lot of people uncomfortable, but of course that's the reality that we live with. And that's why 2 million people don't have to die in the developing world each year because of unsafe cooking and -- and heating fuels. But the long-term solution for that, of course, is to make sure that people actually get richer in the third world. It's a poverty problem. And so I'm a little concerned about the fact that we talk a lot about the Kyoto Protocol. But there's another city with a protocol that we don't talk very much about, the Doha Round. The idea of free trade. That is one that most economists would estimate would give much, much better opportunities in the long run for most countries in the world to actually get rid of their old problems, both environmental, but also all the other poverty-related problems, and then start focusing on environmental problems.

ZAKARIA: Bjorn Lomborg, always a pleasure to have you on.

LOMBORG: Thank you.

ZAKARIA: Come and see us again.

Up next, the "Last Look." Why a text message from Spain's prime minister has all of Uganda atwitter. I'll explain.


ZAKARIA: The G20 Summit will begin Monday in Los Cabos, Mexico, which brings me to my question of the week. The G20, 20 countries represent two thirds of the world's population. How much of global GDP? Is it, A, 66 percent? B, 75 percent? C, 84 percent? Or D, 95 percent? Stay tuned, and we'll tell you the correct answer. Go to for more of the

"GPS Challenge "and lots of insight and analysis. You can also follow us on Facebook and Twitter, remember if you miss a show, go to iTunes. You can get the audio podcast for free, or you can buy the video version. Go there by typing into your browser. You can also find our GPS specials on iTunes. The latest one on immigration, which aired last week will go up on Monday. Buy it, you won't be disappointed. It's really special.

This week's book of the week is "The Dictator's Learning Curve" by William Dobson. It's a great timely read, we discussed it in our "What in the World" segment. Dobson clocked up more than 90,000 miles of travel to research the book. He's interviewed activists and government officials to understand modern dictators. It's a smart book and a fun read.

Now, for the "Last Look." We know that texting while driving is dangerous. Spain's prime minister learned this week that texting while negotiating a bank bailout is also a bad idea. Mariano Rajoy reportedly typed out this message to his finance minister -- "We're the number four power in Europe. Spain is not Uganda." I don't know how it leaked out, but Ugandans have taken their dissatisfaction to Twitter using the hash tag, "Uganda Is Not Spain." One Ugandan tweeted, "Dear Spain, I would rather live on Ugandan bananas than beg for loans. How's the austerity soup?" Another said, "Hello, pot, this is the kettle. You're black." Now, we did a little comparison of our own anyway. Uganda's economy will grow at over four percent this year. Spain's will contract by almost two percent. Uganda's public debt is 25 percent of GDP. Spain's is 68 percent. In the last five years alone, the average Ugandan's income has increased 15 percent. The average Spaniard saw his contract by six percent. One Spaniard may have gone overboard tweeting, "If only we were Uganda." Well, Uganda's economy is one hundredth the size of Spain's.

The correct answer to our "GPS Challenge" question was C, G-20 members represent 64 percent of the world's population, but 84 percent of global GDP. That number is down from 89 percent when the G20 was formed in 1999, as other countries' shares have increased. Still that means the other 170 odd countries in the world add up to only 16 percent of global GDP.

Thanks to all of you for being part of my program this week. I will see you next week. Stay tuned for "Reliable Sources."