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Fareed Zakaria GPS

What to Make of Trump's Secret Plane Swap; Five Years After America's War in Afghanistan. Interview With McKinsey Senior Partner Asutosh Padhi; Interview With Former U.S. Commerce Secretary Gina Raimondo. Aired 10-11a ET

Aired August 16, 2026 - 10:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

[10:00:49]

FAREED ZAKARIA, CNN ANCHOR: This is GPS, the GLOBAL PUBLIC SQUARE. Welcome to all of you in the United States and around the world. I'm Fareed Zakaria, coming to you from New York.

Today on the program, we'll look at Trump's Turkey Air Force One switcheroo and the very serious claims behind that highly unusual move. I'll talk to "The New York Times's" David Sanger.

Then it's been five years since Kabul fell and the Taliban is firmly in control. So what's become of the Afghans who worked alongside American troops against the Taliban during that war? I speak with an American veteran of the war in Afghanistan.

Also, is A.I. coming for your job? We will look at where job losses are likely and what can be done about them.

But first, here's "My Take."

Last week, a minor geopolitical earthquake shook the Middle East. Saudi Arabia and Turkey, two nations that have been openly hostile toward each other for much of the last decade, pledged to go to war in each other's defense. Along with Pakistan, they signed the Mecca Joint Defense Agreement, declaring NATO-style that an attack on one would be treated as an attack on all.

Now, Pakistan and Saudi Arabia have long had close security ties, but Saudi Arabia and Turkey have been bitter regional rivals, clashing over Qatar, Egypt, the Muslim Brotherhood, and most explosively the murder of Jamal Khashoggi in Istanbul, which Turkish leader Erdogan appeared to blame directly on the Saudi crown prince, Mohammed bin Salman.

So what brought them together? Donald Trump, or rather the two countries' diminishing faith in him and his word.

The Iran war has been a masterclass in how to squander credibility. Recall that Saudi Arabia and Qatar both received security guarantees from Donald Trump only last year. But Trump's word is as solid with his counterparts abroad as it was with his bankers in New York. He has repeatedly declared that a deal with Tehran was just days away. By mid-June, one tally counted at least 38 pronouncements that a deal was near or Iran desperately wanted one.

Yet this week, an Iranian source told Reuters that negotiations had made absolutely no progress. The world has learned to treat his Truth Social announcements as a kind of mix of fact and fiction, like some of the A.I. generated videos he posts.

The same pattern is visible in Europe. In May, Trump announced that 5,000 American troops would leave Germany and suggested more cuts were coming. The Pentagon then scrapped a planned deployment of roughly 4,000 troops to Poland. Days later, Trump announced that an additional 5,000 troops would go to Poland.

Sometimes he threatens not to defend Europe against Russia. Other times, he says, he will. Imagine being a European defense minister trying to construct a 10-year military plan around this.

Trump declared this week that the United States had total control of the Strait of Hormuz. Yet ship tracking data recorded just 14 vessels transiting in one day recently, compared with more than 130 a day before the war.

This is not simply a matter of presidential style or rhetoric. It goes to the heart of American power. For eight decades, the United States built up something as powerful as aircraft carriers and squadrons of F-35s credibility. Allies believed American commitments would endure from one administration to the next. Adversaries understood that American threats, while sometimes exaggerated, carried real weight.

The system was not perfect. Washington did break promises and make mistakes.

[10:05:03]

But there was a broad presumption that the United States was a predictable actor and the president's words meant something. Trump treats promises and threats as if he's playing a grand game of bluff. But unpredictability is a very different thing in an alliance than in a real estate negotiation. If allies cannot know whether troops will arrive or leave, or the tariffs will rise or fall, whether an agreement signed today will survive until tomorrow, they do not become more obedient. They become more independent.

Countries are building insurance policies. Denmark chose a Franco- Italian air defense system rather than the American Patriot. Canada is reconsidering its F-35 purchases. European governments are investing heavily in their own arms industries. South Korea has become the second largest seller of arms to NATO countries in Europe, and is helping supply the Gulf's air defense with systems cheaper than Patriots.

The Dutch Central Bank has moved critical Cloud services to a European provider to reduce dependance on American technology. And now Saudi Arabia, Turkey and Pakistan are constructing a security architecture of their own.

None of these moves by themselves amount to a rupture with Washington, but they show a deepening loss of faith in America's word. The same is happening with American threats. If Washington threatens tariffs, extracts concessions, and then threatens tariffs again, governments conclude that accommodation does not produce safety. To paraphrase Canada's Prime Minister Mark Carney from earlier this year, if countries hope that compliance will buy safety, it won't. So the rational response is to build alternatives.

This is how great powers decline, not necessarily through some dramatic defeat, but as other nations quietly stop organizing their world around them.

America remains immensely powerful. It has the world's strongest military frontier technologies, vast capital markets, formidable alliances, and the dollar. But credibility is an asset, too, painstakingly accumulated over generations and astonishingly easy to spend and squander.

During the Cuban missile crisis, President John F. Kennedy sent former Secretary of State Dean Acheson to Paris to brief Charles de Gaulle on the discovery of Soviet nuclear missiles in Cuba. Acheson brought reconnaissance photographs to prove the case. President de Gaulle, hardly an American supplicant, waved them away. He said he did not need the evidence. The word of the president of the United States was enough.

That scene is unimaginable today.

Go to FareedZakaria.com for a link to my "Washington Post" column this week, and let's get started.

I want to turn now to the curious case of Donald Trump and the catering truck. As you are likely aware, when the president departed the NATO summit in Turkey last month, he boarded an older presidential plane instead of the new Air Force One that was a gift from Qatar. But he was then smuggled onto a catering truck to a smaller military jet, which he flew on to the U.K..

What was behind this highly unusual, clandestine action? It was reportedly in response to a threat against Trump from Iranian proxy forces. There's much to discuss on this with my next guest, David Sanger. He is the White House and national security correspondent for "The New York Times," and author of many books about these topics.

David, what is your understanding of the fear of Trump boarding Air Force One?

DAVID SANGER, CNN POLITICAL AND NATIONAL SECURITY ANALYST: Well, the concern, Fareed, was that some Iranian proxy group or maybe Iranians themselves could try to take down Air Force One with a shoulder-fired missile. And it looks like at least some of this intelligence came from the Israelis. From what we can tell, American intelligence agencies had relatively low confidence in its reliability. But you don't take chances with the president's life.

ZAKARIA: So this concern about Iran wanting to assassinate the American president and high level American leaders, correct me if I'm wrong, but it all begins in Trump's first term, when the United States assassinates Iran's essentially the head of the Iranian military, Qasem Soleimani. Right?

SANGER: That's right. After the Soleimani assassination, there were various Iranian plots, fortunately none came to fruition, to try to assassinate the president.

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So the fact of the matter is, there's nothing new in the Iranians wanting to take the president's life. And that probably added to the Secret Service's decision to be extra cautious. And I don't know anybody who's faulting them for faulting them for that. It's actually the decoy plane and putting other lives at risk that people are beginning to question.

ZAKARIA: And in the context of the current war, obviously I'm assuming from the Iranian point of view, the United States and Israel have collectively, in a sense, assassinated most of Iran's top leadership, including the supreme leader, including, you know, dozens of senior Iranians. And this is -- this is payback. But what I wonder about is assassinations are very hard to do.

Are there other things the Iranians can -- could be trying to do that we should be worried about?

SANGER: Well, certainly we've seen a big one, Fareed, in the considerable evidence that the Iranians have used cyber techniques to get into the municipal water systems run across the United States. We know of about a dozen states right now that seem to have had some level of intrusion and manipulation by Iranian cyber teams. The U.S. government has tentatively, but not definitively associated this with the cyber operators of the IRGC.

And that, in many ways is more worrisome because, you know, there's a lot of protection around the president. And obviously, it would be a huge, huge issue if there was an assassination attempt or, God forbid, worse against the U.S. president. But it's a much harder thing to defend the 51,000 municipal water supplies around the United States, many of which barely have security budgets at all.

ZAKARIA: And, you know, what I worry about is for the Iranians, this is an existential war, right? Like they're -- they view this as either they're going to survive this or this regime will collapse. And so you can imagine them being willing to go to extreme measures. Is it your sense that anybody in the administration is thinking about that, that, you know, the Iranians have done things they've never done before, right, like close the Strait of Hormuz?

They've never -- they've never dared do that. And if pressed more, they might do the kind of things you're describing, even though they have never dared to do it so far.

SANGER: There is the fear that we have a lack of imagination about how the Iranians can reach us. Obviously, their missile capability cannot reach the United States or anywhere close. The cyberattacks, that's a different story, Fareed, because as early as 2013, there was evidence and ultimately an indictment of a attempted cyberattack on a dam in Westchester County, New York. I knew it well because as a kid growing up in that area, we used to play on this dam.

I could have told Iranians, there's not much water behind it. But it was pretty shocking that they got into it. And the fact of the matter is that should have been a big warning sign to us. During the Biden administration, there was a big effort to try to provide funding for some of these municipalities to do at least basic cyber forensics and cyber protection. I'm not sure how far that got, but the Trump administration has pretty well disassembled the cybersecurity and infrastructure security agency, part of DHS that is supposed to handle these kinds of things.

And so you're worried about it because, frankly, it's not a fair fight to put a municipality up against a state actor like Iran.

ZAKARIA: On that sobering note, David Sanger, always good to hear from you.

SANGER: Great to be with you, Fareed.

ZAKARIA: Next on GPS, it's been five years since the U.S.'s tumultuous withdrawal from Afghanistan. What happened to America's allies there, who are now living under the Taliban? That story, when we come back.

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ZAKARIA: Yesterday marked five years since the Taliban captured Kabul following the U.S.'s chaotic exit from Afghanistan after nearly 20 years of war. Today, tens of thousands of Afghans who worked with the U.S. military during the war remain in that country, living under the constant threat of retribution from the Taliban government.

And even those Afghan allies who were lucky enough to make it to the U.S. are not in the clear. Their temporary protected status was taken away by former Homeland Secretary Kristi Noem, and there have even been threats of deporting some back to Afghanistan.

Jason Kander is an Afghanistan veteran who pulled off an incredible rescue mission in 2021 to evacuate around 400 Afghans, including his interpreter's family. He went on to found the Afghan Rescue Project. He joins me now.

Jason, welcome. Let me ask you first. Five years after the fall of Afghanistan, you served there. You were intimately involved in the country.

[10:20:03]

What are your thoughts on what does America have to show for a 20-year war in Afghanistan?

JASON KANDER, AFGHANISTAN WAR VETERAN, AFGHAN RESCUE PROJECT FOUNDER: There's a couple of things we have to show for it. We shouldn't forget that we did not have another 9/11 type attack on American soil after 9/11, and that is because we did succeed in denying an external sanctuary from which to train to international terrorists, and particularly to al Qaeda. That's important. We shouldn't forget that that happened.

Now, did we overreach after that and try and build a democracy in a country that may not have been ready for it? Yes, we did. And in that way, we did not succeed. However, if you ask anybody who is an Afghan who lived in that country during that 20 years, there is no doubt that their life improved greatly during that period. And now there is a diaspora around the world and sadly, somewhat still in Afghanistan, of people who understand the value of freedom and will fight for it wherever they are.

And that is something for which we should be proud. For all the mistakes that is something for which Afghan veterans should look back and be proud.

ZAKARIA: Tell us about your reflections on that crazy, chaotic withdrawal and, you know, the Biden administration. Was it that, you know, the Trump administration, first Trump administration had already signaled that they were on their way out? Was it -- was the withdrawal itself mishandled? What are your thoughts?

KANDER: Can I just say yes to all of the above with a caveat? Which is that there's no question that the first Trump administration did not set the Biden administration up for success. And we should also credit the Biden administration for pulling off the largest humanitarian airlift in human history. And at the same time, we should be realistic that after the end of August of 2021, nobody in the Biden administration for a period of months really wanted to talk about Afghanistan because of the political pressure that they were under, and that's when folks like myself and others got involved in private efforts.

But we should also credit the Biden administration because after several months, they saw the error of that and they began to partner with organizations like ours. And that led to about 5,000 people a month, Afghan allies who faced Taliban retribution, getting out of the country and their lives being saved. And that happened all the way to the end of the Biden administration and then abruptly stopped.

And so at the beginning of the Trump administration, there were, as there are today, about 260,000 Afghan allies, men, women and children in that country who are basically in hiding and are a permanent underclass at risk of being killed or imprisoned at all times, and who we broke a promise to because President Trump made that decision on his first day in office.

ZAKARIA: I saw Elon Musk in an interview with "The Economist say that we should only let in people into the United States who share our democratic values. And I was thinking about all those people who we left behind in Afghanistan who were literally dying in a foreign, mountainous land with a strong Islamic and tribal tradition, who believe so strongly in liberal democracy that they had risked their lives, their families' lives for it. And they're the ones we're denying the ability to come to the United States. Right?

KANDER: Absolutely. And furthermore, you know, look, folks like myself who put on the uniform and deployed to Afghanistan, I knew that as long as I survived it, I was going to get to go home. It wasn't like I was going to live the rest of my life worrying about the Taliban finding me. If you had the courage to fight for democracy in Afghanistan as an Afghan, that's a whole other level. Your deployment doesn't end.

But we promised them that if they put themselves out there and things went south, we would, if it became necessary in that deployment for them and bring them to safety. And it is a great moral injury on every person who served in that country, even if it's somebody they didn't personally know. We feel that we personally made that promise to all of them.

ZAKARIA: So in a sense, you're saying this was a promise that American troops personally made to Afghans, that they are -- their country is now reneging on.

KANDER: Absolutely. When I made the decision, really, frankly, kind of a crazy decision at the time that my friends and I, fellow vets and others, were going to work to try and bring a bunch of our allies to this country, despite the fact that the U.S. had already pulled out of Afghanistan and it seemed impossible. We were doing it because we couldn't imagine living the rest of our lives not doing everything we could, because we felt we had made that promise ourselves.

Our country, yes, had made that promise, but that didn't feel any different than us making it ourselves. And now, you know, my translator's family is here and, you know, their kids refer to me as Uncle Jason. My kids refer to their kids as their cousins, and they're making a great difference in our community. And it's made Kansas City better. And that's happening throughout the country. But it should be happening more.

ZAKARIA: Jason, thank you.

KANDER: Thank you for having me, Fareed.

ZAKARIA: Next on GPS, corporate America is betting hundreds of billions of dollars on A.I..

[10:25:06]

Will the bet pay off? And when, if at all, will those rumored mass layoffs of white-collar workers start?

I'll discuss these questions and more with an expert.

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ZAKARIA: Step inside a large company today an A.I. is everywhere and nowhere at once. That's how a reporter in the "Wall Street Journal" recently described the strange paradox of A.I. adoption across corporate America. In a report last year, the consulting firm McKinsey found that 88

percent of businesses are using A.I. for at least one function, but just 38 percent reported that they had begun to scale their A.I. programs company wide.

[10:30:00]

For many businesses, A.I. is yet to dramatically change the way people work or to deliver meaningful returns.

Joining me to discuss why is Asutosh Padhi, a senior partner at McKinsey who advises CEOs on A.I. strategy, innovation and many other things. Asutosh, welcome. You described to me A.I. as a general purpose technology. And you said, we've got to understand something about general purpose technology. So, first explain what that means and what do we need to understand.

ASUTOSH PADHI, SENIOR PARTNER, MCKINSEY: For it. Great to be on the show. When we look at A.I., it is the latest in a series of general purpose technologies. Electricity was one. Computers, another one. Internet and mobile is a third one.

ZAKARIA: So, kind of gets sprinkled throughout the economy.

PADHI: That's correct. And in the cases of general purpose technology, you have to separate between the technology transformation, which takes years versus the economic transformation that takes decades.

So in the case of electricity, after the introduction of electricity, it took 75 years for society to see broad based productivity benefits. In the case of computers, it was 50 years. In the case of mobile and internet, 25 years. On A.I., the technology is here, but getting to broad based economic transformation is going to take time.

ZAKARIA: Wow. That's fascinating. And when you look at it that way, what I'm struck by is the speed with which consumers have adopted it. I mean, OpenAI has 1 billion roughly consumers. What does that tell you?

PADHI: Fareed, I would separate the adoption of A.I. into two parts. With consumers, we have gotten to 2.5 billion users within three years. It's unprecedented. With enterprises, as you mentioned today, the adoption is what we describe as broad but shallow.

So, about 88 percent of U.S. enterprises have adopted A.I. The vast majority of them have adopted it in one function. About 30 percent are starting to see benefits.

But if you ask the real question, for how many companies has it made a really meaningful difference? That answer is about six percent today.

ZAKARIA: Six percent. Wow. So for companies, we're still in the beginning of a long transformation.

PADHI: That is exactly right. ZAKARIA: And when you look at this whole issue of job losses, do you

see A.I. as behind -- the job market is -- I mean, we have very good unemployment numbers, 50-year low, but there isn't that much job hiring at this point, particularly among young people. When you look at where the job losses are, do you think A.I. is to blame?

PADHI: Fareed, there is widespread -- there's widespread anxiety about the fact that A.I. is going to drive sweeping job losses. If you look at the data today, there is limited evidence that that is happening as yet. If you look at the place where A.I. adoption has picked up, for example, software, and you look at the number of software developers as well as number of software engineers, what you notice is that the entry level openings have gone down, but the aggregate number of jobs has still continued to go up.

ZAKARIA: And is it your sense that, you know, you say this could be a decades long process. Are we in the very beginning of that? What do CEOs say when you talk to them about where they think they are?

PADHI: Most CEOs today are frustrated because they believe that they've spent a lot of money on technology and have not yet seen the benefits. Now, the CEOs that are seeing -- that are in the six percent, they're not necessarily using faster models or spending more on A.I. They're using A.I. with humans to solve more valuable business problems. So, CEOs who are seeing the progress are not just focused on productivity and automation. They are focused on driving growth.

ZAKARIA: What do you think -- when people look at this world with A.I., what is -- what is -- what are human beings going to do? What is the human skill that is going to be most valuable in a world in which the A.I. can do so much of the analysis that we used to do so well?

PADHI: So, Fareed, I look at -- today's discussion focuses a lot on energy, on compute and talent. Energy can be secured. Compute can be purchased and talent can be hired.

The biggest differentiators going forward are going to be judgment and trust. Judgment has to be exercised and trust has to be earned. So from a human leadership standpoint, exercising judgment every day and earning the trust of your customers and employees is going to differentiate the leaders.

ZAKARIA: Wow. That is very well put. Thank you so much, Asu.

PADHI: Thank you.

ZAKARIA: Next on GPS, we'll continue this conversation on A.I. and the future of work.

[10:35:01]

If there are mass A.I. layoffs, or even modest ones but spread in particular areas, what does that mean for the workforce? The former U.S. secretary of commerce, Gina Raimondo, has a plan that is up next.

(COMMERCIAL BREAK) ZAKARIA: We just discussed how A.I. hasn't yet dramatically transformed the way many businesses operate. And those mass layoff fears are fears for now.

[10:40:03]

But what happens if and when those fears become reality? The last time America had a big transformation with globalization, technology, the internet, it caused a big backlash as it left parts of the country left behind and deindustrialized. The former U.S. secretary of commerce, Gina Raimondo, wants to make sure it doesn't happen again.

Welcome. The story is personal for you. What happened to your father?

GINA RAIMONDO (D), FORMER RHODE ISLAND GOVERNOR: He worked for almost 30 years at the same factory. The Bulova watch factory in Rhode Island back when Rhode Island was a juggernaut of jewelry manufacturing. And then, like, one day, he and all of his friends were summarily dismissed because the jobs went to China.

And he was 56. He was a smart man. And he would always say he needed a bridge to another chapter of work. He wasn't ready to be done working.

And by the way, Fareed, I believe what happened to him happened to millions of Americans all over the Midwest. And that bitterness, anger, having been left behind is what brings us to today's divisive politics.

ZAKARIA: So, when you look at A.I. now your fear is you're going to see another wave like that. Are you -- when you talk to CEOs, are they preparing for it? I mean, give us a sense of what people are thinking, how people are thinking.

RAIMONDO: There's a lot of unknown. I think we're in the first or second inning of A.I. But they are seeing it. If you -- it's not every job. And I want to say this, I'm an A.I. optimist. I'm pro-innovation. I -- and we've talked about this.

In some number of years I firmly believe A.I. will create more jobs. I do like every innovation. I'm worried about the transition. And if your job today is comprised of tasks which are going to be automated, you're at risk.

ZAKARIA: Yes. And so, describe what it is you've done. You've raised an awful lot of money, $600 million.

RAIMONDO: Yes.

ZAKARIA: What for?

RAIMONDO: Because I think in order to make sure that America leads this global A.I. competition, we have to make sure we go through the transition without a period of high destabilizing unemployment. And this is in everyone's interest.

A lot of the money I've raised is from companies. Why? Because they don't want to see double digit unemployment. That's bad for their business. And the reality is we aren't ready for it.

Our workforce systems are not ready for it. Our education systems aren't ready for it. Our social insurance systems aren't ready for it.

Fareed, unemployment insurance, which is the only social benefit to get someone from one job to another, was created 100 years ago and hasn't been innovated. College, 40 percent of people who go to four- year college don't get a degree. They come out with debt and no job.

There's very few options for, say, a 50-year-old woman who has spent 20 years as a call center worker. She loses her job. What does she do now?

And so we have to -- what we are doing is we're working with companies and through governors to pilot new things on the ground. Pilot a year of service for entry-level workers. Try it, see if it works. Try wage insurance to help somebody get from one job to another.

ZAKARIA: One of the things that you saw when you were secretary of commerce in the Biden administration was red states would refuse to take benefits that President Biden was offering, because they didn't want to seem to be cooperating with the Democrats. How are you getting around that problem because you are a Democrat?

RAIMONDO: Yes. Thank you for saying that. It's a bipartisan effort. My co-chair is Governor Holcomb, former Republican governor of Indiana. And we are partnering with Democrats and Republicans.

Sarah Huckabee Sanders excellent governor, Republican in Arkansas, is one of our first pilot states. She's working with us. Wes Moore, great governor of Maryland, Democrat working with us.

This is a business imperative. This is an economic imperative. This is about America competing and outcompeting the world. And I really don't want anything to do with politics right now. This is about being obsessed with results.

So Americans -- Americans need to thrive in the age of A.I. Americans are afraid of A.I., you know? If you ask the average American A.I., they hear, I'm going to lose my job. And if there's no trust, they won't adopt it. And if they don't adopt it, America won't lead the world. So we have to show the average American, every American, there's a place for you in an A.I. economy.

[10:45:05]

No one said that to my dad. No one said, there's a place for you in a services economy. And as a result, they were left behind.

ZAKARIA: All right. You're not interested in politics right now.

RAIMONDO: For this project. For this project.

ZAKARIA: Once this program -- once this project succeeds, we will have you back to discuss what exactly you might do next. I wonder why.

RAIMONDO. I love that. Yes.

ZAKARIA: Next on GPS, Sweden has long been a poster child for an inclusive form of democratic socialism with a generous welfare state. But in recent years, the country has come to resemble something very different. I will tell you what changed and why when we come back.

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ZAKARIA: And now for the last look. Across Europe, liberal democracies are paralyzed. Their growth has stalled. Their debts are climbing, and they cannot bring themselves to change course.

France has not balanced its budget in more than 50 years, and spends nearly a quarter of all public spending on pensions. Britain's new prime minister, Andy Burnham, has inherited a daunting task of possibly having to raise taxes further to cover the rising costs of health and social care. This paralysis leaves much of the continent with little room to meet today's challenges, from tech innovation to rearming against Russia.

But one country offers a way out, Sweden, often still remembered fondly by progressives everywhere as the poster child for democratic socialism. The country, in fact, has made a remarkable pivot toward an entrepreneurial free market economy. It's real edge, though, is a cultural willingness to keep changing when the old model stops working.

For much of the 20th century, Sweden was a pioneer of the generous welfare state. The Swedes even had a name for it folkhemmet or the people's home. The social contract was that everyone works, everyone pays in, and in return everyone is cared for. As the saying goes, from cradle to grave. It delivered and sometimes to an absurd degree.

In the 1970s, Swedish children's author Astrid Lindgren of Pippi Longstocking fame, faced an astronomical 102 percent marginal tax. But that era belongs in the past. After deregulation began in the late 1980s, Sweden suffered its worst economic crisis since the Great Depression. Its banks had to be rescued, while unemployment and debt soared.

Out of that wreckage, Sweden charted a new course led by Carl Bildt, who entered office in 1991 as the country's first conservative prime minister in six decades. The government slashed public spending, privatized state monopolies and carried out what was known as the tax reform of the century.

More than three decades on, these reforms have reshaped Sweden. The top income tax rate has fallen from nearly 90 percent in the 1980s to 50 percent today. And as "The Wall Street Journal" reports, public social spending, including on education, health care and pensions, has fallen to roughly 24 percent of the economy. That is near the U.S. level, far below France or Italy.

Sweden's government debt is just 36 percent of GDP, much lower than the U.S., which now stands at more than 120 percent. Its Social Security system invests a pool of worker savings in the market, turning every future Swedish retiree into an investor. And despite its small population of under 11 million, Sweden has produced a remarkable number of tech unicorns startups worth more than $1 billion, which includes Spotify, Skype and the mobile payment company Klarna.

As Lars Jonung, former chief economic advisor to Carl Bildt in the 90s, notes, we have put a capitalist revolution into a former, very strongly socialist-oriented society. But this new model has created problems of its own. Wealth inequality has widened. And since Sweden partly privatized its education system, a bitter dispute has broken out over so-called free schools, which are publicly funded but privately run. Critics say these schools hire less qualified teachers so they can make a bigger profit.

Sweden's willingness to transform isn't just limited to the economy. In 2015, as the migrant crisis hit Europe, over 160,000 asylum seekers arrived in Sweden that year. More per capita than anywhere else in Europe.

For decades, Sweden was known as a moral superpower for its focus on human rights. But when arrivals overwhelm the country, Sweden shifted to build one of the continent's most restrictive immigration systems. This mood was hardened by the rise of a new far-right populist party, the Sweden Democrats and the surge of gang warfare in some segregated, immigrant heavy neighborhoods. The violence briefly gave Sweden the highest rate of gun deaths in the E.U. in 2022, though the numbers have fallen since.

Swedes will vote in a general election next month, where, whatever the result, these broader shifts are likely to endure.

[10:55:05]

The country's new model of a leaner state and tighter borders now has broad support across both right and left. Ultimately, the Swedish experience shows a relentless ability to reach consensus in times of crisis and then adapt.

As the Swedish historian Lars Tragardh observes, Swedes are not great political philosophers. We are much better as engineers, including social engineers. When we encounter a problem, the question is not what is right, but what works?

Indeed, the liberal democracies that endure are the ones that are pragmatic enough to look at failing systems without being defensive, and then reform them thoroughly to endure in the future.

Thanks to all of you for being part of my program this week. I will see you next week.

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