Photo: Bloomberg TV
Jeremy Grantham, the brilliant head of investment firm GMO, appeared on Charlie Rose last week.Grantham maintained his usual grim tone.
But Rose challenged him.
“How many have stepped forward to say doom, doom, doom and doom, whether it’s the economy, whether it’s the planet, whether it’s — and all of a sudden you realise that it wasn’t quite that bad, that something came along to avoid the results?” asked Rose.
Grantham reminded Rose that history’s greatest civilizations always “developed a kind of chutzpah, an arrogance in the belief of what they can do.”
“And they overreach, the weather turns against them, et cetera, et cetera, and they collapse,” he said. “Not one or two, every civilisation collapsed. And now we have a global civilisation.”
Grantham has long warned of scarce food supplies, climate change, and economic growth rates that he believes are destined to decelerate.
But, during the interview with Rose, he clarified that doom doesn’t have to be a sure thing.
“However, I am an optimist in two ways,” he said seemingly out of nowhere. “We have two gifts that none of those hundreds of failed civilizations had, that might — it’s quite undeserved, incidentally, it’s pure luck — might get us off the hook.
“One of them is the fertility rate. Malthus never dreamt for a second that as people got richer they would volunteer to have fewer children. Back in those days if you were rich you had 20 children, 15 children. And now you have 1.5.
“And we have made enormous progress. My favourite being Iran, a Muslim society. In 1960, seven children per woman. And now it’s 1.5, 1.6.”
He acknowledged that some emerging markets are facing labour issues due to insufficient population growth. However, he thinks those are just short-term problems.
“The second good reason,” he continued “is alternative energy.”
“Every wave of technology has been — has required a wave of energy. Here we have a wave of technology that does exactly the reverse. It suppresses the demand on our finite resources of coal and oil. Every time you have a brilliant new idea, an IPO, capitalism at its best, developing an energy-saving technique, solar, wind power, storage, a grid, a new state of the art grid system, all of those suppress the need to use our finite resources. And that is wonderful. And that is happening faster than people realise.”
Those are two pretty big gifts.
Watch the whole interview at CharlieRose.com.
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