Global Poverty Condemned by Thomas Pogge

Pogge: Global Poverty - YouTube: "

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Uploaded by carnegiecouncil on Feb 3, 2012


Thomas Pogge compares citizens who support the current international system that allows one-fourth of the world's population to live in abject poverty to passive Germans during the Nazi era.

This Carnegie Council event took place on January 19, 2012. For complete video, audio, and transcript, go to:http://www.carnegiecouncil.org/resources/transcripts/0466.html

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Many talk about values or morality in global matters, but few are as steeped in the theory and practice of ethics in international affairs as today's speaker, Thomas Pogge. 

He's a political philosopher who applies his ideas to the field of development economics. 

After earning a diploma in sociology at Hamburg University, Pogge began his scholarly career at Harvard, under the wing of the esteemed justice theorist John Rawls. Ph.D. in hand, Pogge went on to refine and defend Rawls's ideas in two books, one published in 1989 [Realizing Rawls] and another in 2007 [John Rawls: His Life and Theory of Justice].

He has since turned his attention to global poverty and global health, promoting the Health Impact Fund, an alternative system of pharmaceutical innovation and access to medicine for the developing world.

Pogge is on faculty at Yale University and he also holds posts at the University of Oslo and the Center for Professional Ethics at the University of Central Lancashire.

I could fill the rest of our time telling you about his various other accolades and affiliations, but I'm really eager to let him get in on this conversation, so we'll begin.

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JULIA TAYLOR KENNEDY: Let's start with what drew you to the study of ethics, political philosophy, justice.

THOMAS POGGE: It's always hard to answer questions about one's own biography, but I think the first sort of big thing that I remember from childhood is waking up and finding myself living in Germany, in a country that had just gone through some horrendous thing. As a kid, when you grow up, you feel the world is normal and these adults are all wonderful people. You take your cues from them. You trust them.

I gradually learned that something really very extraordinary had just happened here. Lots of people had been murdered. There had been a horrendous war that Germany had visited on the rest of the world. All the people I thought of as models, role models, adults, had been in some way or other involved in that—my teacher, my parents, everybody.

It was an amazing awakening. As a kid, you sort of struggle with that. I lost for a while all trust in adults. I felt that they talk a good line, but how do you really know it's true?

One tremendous experience was, I was in a flower shop at age seven or so, and I said, "How do I know that these flowers are not suffering, tremendously suffering? They've all been cut off. The parents say that the flowers don't suffer, but how do I really know that?" This was a reaction to this experience of losing faith in adults.

So this gave me a kind of anti-authoritarian leaning early on. That was reinforced in 1967. The shah came to visit Germany, and lots of students were beaten up by people he brought along—bodyguards, so-called, 50 or 60, who beat up the students. The police watched and did nothing.

Then the Vietnam War—America had been a big role model for me. I was in love with America for a long time, until they made this horrendous war in Vietnam that was on every evening news and so on.

So it was events of that sort that got me involved in politics and justice issues.

J : Then how did you get from Hamburg to Harvard?

T : That's sort of embarrassing. It was totally contingent. I was studying sociology. I knew very, very little about philosophy. The woman I was living with at the time was a psychologist. We were members of some elite honor society, where we had a year abroad coming to us.

We said, "Where are we going to go?"

She said, "Oh, we have to go to Berkeley. That's the best place for psychology."

I wanted to go to Oxford because I sort of liked the architecture.

So we said, "Ah, we want to stay together, so let's just go to Harvard."

J: You'll settle for that, somewhere in the middle.

T: Settle for that. We went as visiting students just for a year. Then we were overwhelmed by how good it was. It was really good. I was in the philosophy department, where I knew very little about philosophy, and people like Rawls and Quine and Putnam and Nozick and all these people were running around. I learned pretty quickly that they were all famous, really famous.

So I just said, "Well, why don't I stay here?"

So I went to the director of graduate studies and said, "Sign me up. I'm willing to stay here for the Ph.D."

He looked me up and down and said, "Do you know we admit five people a year, and normally people we don't know. Once we know somebody and we know they're not Kant"—that's literally what he said—"we normally don't admit them."

So I said, "Well, we'll see about that. How many courses do graduate students normally take?"

He said, "Three."

I said, "Okay, I'll take six. Let's see what happens."

For two weeks, I was sweating. Kant's Critique of Pure Reason, Frager, Russell, Wittgenstein, mathematical logic, and so on and so forth, all at once. It was the worst semester of my life, let's put it that way. Pretty hard.

J: But you stuck with all six?

T: Yes, I did. In the end—it must have been a bad year for other applicants or something, but they somehow—

J: You're being too modest.

T: Well, Quine kind of liked me.

J: So did Rawls, obviously.

T: No. He was on leave. I met him once at the mailbox, and that was it.

Quine thought that I had some intelligence and logic or something.

J: So what was it like to study under John Rawls? He was ultimately your advisor.

T: He was my advisor, yes. Rawls was a very strange personality. He was very, very shy. People at Harvard are pompous for the most part. They're important people. They know a lot and so on. They talk very fast and try to be very, very smart—to outsmart other people.

Rawls was the exact opposite. You would think that he was just visiting or something. He was speaking slowly. He had a stammer all his life, and especially at the beginning when you didn't know him well, he would stammer a lot. He was very reluctant to disagree. For me, it was very frustrating. I would bring him a piece of writing that was very critical of his work and say, "Okay, punch me out. Obviously this is wrong, what I'm saying. Tell me why. How would you defend yourself?"

He would say, "Well, this is very thoughtful and very well done. Let me think about it," and so on. He was very, very modest. It was difficult to get into a fight with him. You could have a fight with Nozick any day—it was very easy—but not with Rawls.

Very sweet, very gentle and friendly, and so on. But as an advisor, I needed somebody who would really counterpunch, and I didn't get that from him.

J: What attracted you about his ideas in your time there?

T: The theory is just incredibly beautiful to read. At first reading, it's boring and forbidding. Then when you go through the theory, really reconstruct it in your own mind, it has a unity and elegance that is just stunning. That was the main thing that attracted me to it. Then I thought, here is a wonderful opportunity to make Americans understand that their foreign policy is too imperialistic and that they should reach out more to the poor people in the world and so on.

All you need to do is take the same fundamental idea, imagine yourself not knowing in which country you were born, whether you are born rich or poor, and think about how you would want the world to be organized, how you would want foreign policy to be conducted, and so on. It's pretty obvious that you would want a much more peaceful, a much fairer world, a fairer world economy, and so forth.

It seemed too obvious for words, but the first to disagree with that was Rawls. He didn't like this idea. He thought that his original position construction couldn't really be applied to the world at large. He had different reasons for why that wasn't good. That was much of what we argued about for those years.

The only success that I had with him was, in the end, that he wrote up his own ideas about it. He wrote up a book called The Law of Peoples, his last major work, in which he said how to do it: If you really were to take my theory and globalize it, this is how it should be done, and not Pogge's way.

J: So you could sort of enter into this dialogue with him.

T: Yes, many, many hours. Even after I left, we would talk on the phone. Every now and then I would go up and visit him and so on. We would always have long, long arguments about foreign policy. He was a person who was fundamentally focused on the domestic. His heart was in America. He was a patriot in that sense. He said, "I care about justice in America."

The rest is more complicated. The world is not really to be trusted. If we give too much power away, things are not necessarily going to be better. It's good for the United States to play a leading role, to preserve their leadership role, because we are the repository of justice in the world and the kind of "city on the hill" metaphor.

J: It seems that these ideas that you are now writing about are rooted in that time that you were having these discussions with Rawls. But your authorship seems to have turned less and less theoretical and more and more practical over the years. What was the impetus to do that, to really focus on the practical application?

T: There was a push and a pull, I think. The push again came out of Rawls and the frustration that I felt that Rawls's theory was fundamentally under-specified. He was thinking of himself as a philosopher who would lay out the general principles and he would then turn it over to economists and lawyers and various other people—technicians—who would apply it. That seemed to me to be fundamentally misguided and naïve, because it seemed that the transmission, bringing the two together, was not sufficiently clarified for other people then to take over.

The defining moment, I think, was 1979 or so, when I had a conversation with him. I went to him and I said, "How do we know whether the first principle is satisfied in the United States?"

My concern in particular was, to what extent do the basic liberties have to be secure? How secure do they have to be? If there's a lot of crime, for example, in black neighborhoods or a lot of crimes against women and so on, can one then say that physical integrity is secure, that the first principle is satisfied?

His initial answer was to say, "You have to ask economists and lawyers and specialists the technical questions. Not of interest to me."

Then I said, "But how are they going to answer the questions? It's your theory. You have to give them some sort of guidance about how they can apply your principle. Otherwise, the principle doesn't really have any meaning. What does it mean?"

If you know a little bit about Rawls, it's a very, very important question, because if the first principle isn't satisfied, social resources have to be devoted to satisfying it. Forget about the second principle for the moment. If it is satisfied, then we can focus social resources on satisfying the second.

J: I want to move on to a new topic, but just for those who aren't familiar, could you summarize the first and second principles?

T: The first principle just says that everybody is entitled to a scheme of basic equal liberties, and these basic equal liberties have to be secure. Here the question is, what does security mean?

The second principle mainly says that social and economic inequalities should be arranged in such a way that the people in the lowest socioeconomic position are as well-off as possible. So inequalities are justified only if they benefit, so to speak, the bottom position.

J: In your own career, you start applying some of this theory. Why did you start with thinking about global inequality and global poverty as your first?

T: Simply because the problems there are the largest. There's torture. There's suppression of political opinions and so on and so forth. But in terms of sheer quantity, how many people suffer, how many people are excluded, how many people don't have their human rights fulfilled, this is a vastly larger problem.

Biographically, I could maybe add one sentence. It was a trip through Asia that woke me up from thinking about—that made me alert to that topic. I traveled for four months or so halfway through my graduate career through all of Asia, by trains and buses and hitchhiking and walking and this and that. I just couldn't believe the poverty. I had known theoretically that people are poor in India and so on, but what that meant, how poor they are, was just beyond my imagination.

JULIA TAYLOR KENNEDY: So when you write about global poverty—there are many who write about global poverty and say we have a duty—and we have had many people who come here and say that we have a duty to give to the poor, give to the World Bank or whatever organization we choose to help with global poverty. You take it a couple of steps further. You don't shirk from strong statements.

You have compared citizens who support today's international system to passive Germans during the Nazi era or to those who have acquiesced to slavery in this country.

Why go there? Why say this is a crime?

T: Because it's true. It may not be the most politic thing to say. It may not be the best way to motivate people. But I really think it is true.

Again the Nazi period—this awakening that I described in my youth was very fundamental there. Lots of people around me, lots of the adults, if you talked to them, said, "What are you talking about? This is certainly not a minor thing. I know my heart. I never intended ill. I never really hated anybody. I never really—"

I said, "Yet you were part of a big organism that, together, did an enormous amount of damage."

Hitler alone could not have killed all these people, and the few people around him. It was done systematically by all these people, in some way, collaborating. Nobody wanted to be impolite. Nobody wanted to be different from the others, and so, like a herd, they went forward.

That's what we are now doing. It seems totally normal to us. We all feel very morally all right about what we do. We nevertheless uphold an economic system in this world that, totally needlessly, keeps one-quarter of the world's population in abject poverty, where the combined income that they have is just three-quarters of 1 percent of global household income—an incredibly small amount.

The world is now rich enough in aggregate to do away with poverty in a way that we rich guys would barely feel. It's a crime to let it continue. One-third of all deaths in the world are premature from poverty-related causes.

This is not a minor thing. This is just a very, very massive problem or crime against humanity.

J: I want to return a little bit to the economic inequality, but talk first about a discrete problem that you have sort of taken on and come up with a solution for, how to think big and subvert the system. Let's talk about the Health Impact Fund. Why did you initially say, "The pharmaceutical system is the one I want to take on"? Why was that the first one where you said, "Okay, this is what I can design a solution for"?

T: Again, there are reasons and causes. The cause was, I was invited to spend a year at the NIH [National Institutes of Health]. I thought, this was nice of them to invite me, and so let me do something on health. At that time I knew nothing about health. I couldn't have located an organ in my body or anything like that.

Then I wrote up a few papers. One of them was this idea. I looked at this for five minutes and said, "Wrong. This is not how pharmaceutical R&D [research and development] should be incentivized. You shouldn't have high prices."

These are medicines. These are very urgently needed things. You can crank out pills by the thousands at very, very small cost. The cost of the ingredients is minimal. The cost of putting them together is minimal. Why can't poor people have these medicines? It's insane to sell it at a price that is 100 times the cost of production.

Then I thought, how, then, do you do it? Obviously you don't want to slaughter the cow that gives the milk. So you have to somehow reward R&D—

J: The costs are high because of the innovation.

T: Because of the R&D. The first pill costs a fortune. Then the next 5,000 cost nothing at all, or 5 million or 5 billion. That's exactly the problem. It's the subway problem, if you like. The first subway ride costs billions of dollars, and then putting an extra rider on the subway costs nothing at all.

The trick is to think about a way to incentivize it so that it's cheap for the following people: That we rich people incentivize the drug companies to develop new medicines in a way that doesn't exclude the poor, that doesn't require us to arm-twist poor countries into suppressing the generic trade, which is now what's happening.

J: So that is, in effect, what the Health Impact Fund would do.

T: Precisely, yes.

J: So it collects all these donations into a central holding place and then rewards innovation?

T: Yes, that's basically the idea. It would be government-sponsored for the most part.

The way we picture it is that there would be a certain pool of money available each year to reward new pharmaceuticals. Pharmaceuticals could be registered by the company for these rewards, and if you register, you get a reward that is proportional to the health impact that you achieve with your medicine. If your drug is responsible for 8 percent of the health impact of all the registered drugs in a given year, you get 8 percent of the reward pool. That repeats for ten years, and at the end of the ten years, you have had your reward and you drop off.

What you have to do in exchange, if you register your drug for the rewards, is sell the drug at cost. You make no money at all, no markup at all, sell it at cost. That is determined, for example, through a competitive bidding process among generic manufacturers. You put it out for tender.

The cheapest manufacturer gets the contract, produces the stuff in large quantities; it's sold everywhere in the world at the cost of production, and the innovator—the people who put in the hard work, the expensive work of research, development, testing—they get paid according to how good the drug is, how much health impact it achieves.

J: How do you measure impact?

T: You measure it in quality-adjusted life years [QALYs], which is a metric that has been around for about 20 years already.

The quick way to explain it is, think of a human life as 80 inches long and 1 inch tall, a little plank. That's when it's fully healthy. Then it's 80 square inches. Then diseases nibble away at the end, because you don't quite live your 80 years, or they nibble away from the top, because you are sick during certain periods of your life. So an actual life may only be 64 QALYs or 33 QALYs or something like that. What diseases nibble away, drugs can restore or drugs can avert the nibbling away of. So the drugs get rewarded in accordance to the quality-adjusted life-years that they avert being lost.

J: You rolled out this idea of the Health Impact Fund in 2007, 2008?

T: Yes.

J: Have you seen any effect from the global financial crisis on the pickup of this idea?

T: It goes in both directions. One direction is that many politicians, when they hear any talk about spending money and so on, say, "Go away. Come back in five years. This is not the time to spend any new money."

But then, if I get a second chance to talk to them, I say, "Look, this is actually a much more rational system. The present system isn't just immoral, which is bad enough; it's also deeply irrational because we are wasting so much money."

For example, in litigation, billions of dollars go for litigation between the brand-name companies and generic competitors or brand-name against brand-name. Billions of dollars go for advertising, because if you make a huge markup on your product, then, of course, you try to have more sales, and so you spend billions on advertising. Your competitor also spends billions on advertising. In the end, you are just where you started, except that billions have been spent.

So the existing system is extremely irrational. We could actually save money, for governments, for insurance companies, for taxpayers, if we went to this more rational system of the Health Impact Fund. That's why it's such an attractive idea, because the interests of the poor can be tied together with the interests of the rest of us. Most of the money that we pay for drugs, in the end, ends up in lawyers' pockets, advertisers' pockets, and so on, not in new research, not in safer products.

J: You're talking about a system in which billions and billions of dollars are lost. That can also be applied to something else you have spoken out loudly on, which is regulatory capture of businesses giving huge campaign donations and spending a lot on lobbying of the government, which you were talking about before Occupy Wall Street. Tell me more about that and your thoughts on regulatory capture and what we can do to move in the other direction.

T: Regulatory capture is a pretty old concept. Mancur Olson is involved in it and so on. We are very familiar with this phenomenon in the United States.

We all know that companies have lobbyists in Washington. These lobbyists are paid by the company to achieve certain legislative outcomes, and companies invest in lobbying because they get more money back. A very simple process: You spend a few million dollars and you get a few billion dollars back from public monies.

What hasn't been studied as much is lobbying one level higher up, at the supranational level. There, the lobbying is much more effective still. Here in the United States there's a counterweight. There's democracy. People vote. If you give too much to banks and corporations and so on, then sooner or later people will be fed up and will vote for another party or vote for different people and eventually put a stop to it. But at the international level, there's very little transparency. There's no democracy. It is a field day for lobbying, essentially.

The way you lobby is by going through the largest, most powerful governments. You lobby the American government, the European governments, the Japanese government, and so on—everybody in the G20, essentially. You try to lobby them for certain outcomes, certain treaties, certain agreements that are to be made at the international level. These things are essentially for sale.

What's particularly hospitable there to lobbying efforts is the fact that these negotiations take place behind closed doors. It's very difficult to figure out what's being negotiated. It's very difficult even after the fact. You can then see the treaty text, of course, but you still don't know who lobbied for certain language in the text and so on, how certain things got in there.

So behind this mantle of anonymity, governments can push things forward and can please their constituency. So just as in the domestic case—in exchange for campaign contributions and so on, parties and politicians are willing to do all sorts of things domestically—they are certainly willing to do things internationally as well.

So we end up with an incoherent quilt of rules and regulations at the international level that benefits various privileged, powerful parties—multinational corporations, banks, industry associations, and so on—but is, on the one hand, dysfunctional and incoherent (see global financial crisis) and, on the other hand, causes a spiral of ever-increasing inequality, which, of course, then strengthens the capacity of the more privileged agents in the next round to lobby even harder for the outcomes that they want.

J: We're in a time when a lot of people are talking about these issues. It's in the public discourse, here in the United States, about morality, values, a loss of values in our own political system. Do you find that that conversation is too limited to domestic issues and isn't considering these global issues that you are bringing up enough?

T: Yes, absolutely right. I'm very grateful that it's there now. For many, many years, I have always laughed about the United States and said, "These people don't even know how inequality is increasing by leaps and bounds in the United States." There was this total disconnect. In economics departments, people would talk about the Kuznets curve, about how inequality went up to 1928 and went down afterwards. But since 1978, it has been rising, and it's now where it was in 1928.

Virtually nobody knew about the development of inequality in the United States. Nobody in the United States knew.

That's now widely known. Everybody cites the figures. Everybody knows that inequality has been increasing. Everybody knows that it has been increasing especially at the very top, the top 0.01 percent of the U.S. population. They have increased by a factor of 7 their share of national household income and so on.

But the global dimension is ignored. It's an incredibly important dimension. The strongest players in the United States are now lobbying, not so much for domestic things, but they are lobbying for international things. It's kind of forum-shopping. What you now do is, you try to get rules and regulations adopted at the supranational level that benefit you, not only in the domestic theater, but internationally. So a great deal of the problem, the undermining of our democratic rights, occurs at the international level, and no longer just at the domestic level.

J: I want to take some questions, but I don't want to end on such a scary note. So I'm going to ask you another question. Sorry to be a little leading. Do you see areas of hope? Are you optimistic that maybe out of this domestic conversation can rise a global one?

T: Yes. I think there are two different sources of hope here.

One is what I already mentioned, the education. Many of us learned the hard way that there is a problem in our system, a systemic problem, and that we have to sort of think more intelligently, more systemically about what the sources of that problem are. That's one thing.

The other thing is a more subtle hope, but maybe even a stronger reason to hope. The global financial crisis wasn't even so good for a lot of the big players. So what you get here is a kind of prisoner's dilemma.

You have some players that are strong enough to lobby, strong enough to buy themselves a little slice of the rule-pudding. The car companies have certain interests, and so they combine, they lobby, and they get a certain result. The banks have certain interests, the IP [intellectual property]-heavy corporations and so on, the drug companies. Everybody buys themselves a little bit of the rule-pudding at the international level and sometimes at the domestic level.

The outcome of that is incoherence in the rule system. The rules are often ill-fitting. What people have learned, I think—even very powerful agents have learned—is that they have more to fear from the power of other very powerful agents to buy themselves pieces of the rules than they have to gain from their own power.

So the prisoner's dilemma situation is that maybe they would all be better off if all of them had less power. Of course, the best would be if only I have power and nobody else. But that cannot be had. So the second-best is if we all have a little bit less power, we very powerful, very privileged agents, and the rules are shaped in a somewhat more coherent way, serving common purposes, defined through a somewhat democratic process.

That's if they were intelligent enough to understand it and—here comes the other important point—if they were more long-term. That's one big danger that corporations—I was supposed to end on a positive note.

J: No, no, no. I'm feeling better now. I'm feeling better. So you can continue.

T: The problem is that corporations have long-term interests, but the people running them often don't. A huge problem. So the people running them don't see this long-term prisoner's dilemma situation as a real problem. They say, "Well, the crisis is not going to happen in the next six years. Let me just cash out on my bonuses and my stock options and so on and so forth, and if my company then goes down the tubes in 5 or 10 or 15 years, that's all right."

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