William Nordhaus

It is at least theoretically possible for everybody to be better off.

The economist whose work is at the center of the show is a guy named Bill Nordhaus.

And a few years after we talked to him for this episode, he actually won the Econ Nobel for his work on the economics of climate change.

Last week, Bill Nordhaus died at the age of 85.

And so today we are rerunning this episode in his memory.

I hope you like it.

Which isn't going to be invented for 100 years.

From an economic perspective, if you want to try to quantify how much of a pain in the butt it is to make something, or at least how hard it is to get that thing, you can ask a simple question.

I was reading this statement by a Yale economist who won a Nobel Prize.

His name is William Nordhaus.

You know how the rich are getting richer and a bunch of robber barons, as Robert Rice, the Bill Clinton former labor secretary, put it, referring to Elon Musk.

He says that innovators, people like Elon Musk, capture on average 2.2% of the total surplus they create between 1948 and 2001.

Let me, uh, illustrate that.

And let me do, uh, um, Bill Nordhaus is a friend, and he's a scholar and a gentleman.

He just happened to have been wrong on, on-

[laughs]

Plenty of people treat capitalism as synonymous with markets, which helps us understand what is possible to change.

I don't know if we're swearing on this podcast, but fuck William Nordhaus.

Welcome to the Praxis podcast, a podcast on understanding the economy and how it dominates our lives.

Before we kick off, I'd like to acknowledge the traditional owners of the land on which we're recording, the Yagura and Turrbal people, their elders past, present and emerging, and acknowledge that sovereignty was never ceded.

What Yeah, I don't know if we're swearing on this podcast, but Jesus.

Yeah, you can definitely swear on the Green Institute podcast.

All right, well, fuck William Nordhaus.

Yeah, that's three and a half degrees of warming.

Most of the countries have accepted what economists have done in terms of trivialising the dangers.

So to put a bit of a number on that, William Nordhaus is the most prominent economist who talks about climate change, claimed that four and a half degrees of global warming by 2100 would reduce the GDP in 2100 by 7%.

So rather than GDP being 100, let's say, it'd be 93 if we get to four and a half degrees of warming.

Now, climate scientists say four and a half degrees of warming is an extinction event.

Oh, absolutely.

I mean, it isn't a case that like the economists have been supported by the fossil fuel industry because what the economists are saying is basically saying, continue burning that oil, don't worry.

And so people like William Nordhaus will get funding from fossil fuel interests in a way that I would never get that funding.

But they're not saying it because they're being paid.

And that's sort of a problem identified in the early 20th century.

But by then, you know, early 21st century, you have people like Nicholas Stern, like William Nordhaus, who's the other sort of major climate economist, who won the so-called fake Nobel in economics a few years ago, for also doing a kind of climate economics focus around this question of missing prices.

And they just say, well, this is why climate change is happening.

We have not been paying for carbon emissions.

This guy goes on to say, and this is where he would be a total variance with your view of the world, much more sympathetic to my view of the world, that, you know, the focus on individual fortunes overlooks the vast economic value that many billionaires actually create.

And he quotes a Nobel laureate in economics, William Nordhaus, who who says that his research shows that innovators capture just 2.2% of the value they provide to society.

And he goes on to talk about Amazon, Apple, Google, who basically started life in garages.

So he goes on to say that rather than demonizing and attacking these people who created successful enterprises from nothing, that it's much better to tackle the privileges, the loopholes and the abuses that allow wealth to be unfairly acquired rather than undermine ventures that create it.